Financial Regulation Overhaul

Debate on financial services reform gets underway in the House today. Increased oversight of systemic risk and the creation of a new federal agency to protect financial consumers are major components of the overhaul in the wake of the financial crisis. For insurers, a new federal insurance office that will collect information about the industry and advise on policy issues is in the pipeline. For more on this story check out a Reuters article by Kevin Drawbaugh. Yesterday PriceWaterhouseCoopers said in a new report that the insurance industry may not see a return to relative stability and certainty for a few years as it reacts to the effects of regulatory reform, increased government intervention and potential tax law changes in the aftermath of the financial crisis. Within five years, the industry landscape could look markedly different, and Americans may find their insurance policies underwritten by a handful of large, well-capitalized firms that can demonstrate financial strength and economies of scale, according to PWC. It said the most significant of nine key developments for the industry will likely be sweeping regulatory changes resulting from proposed legislation to reform health insurance and increased federal oversight of insurance and financial industries. I.I.I. info on regulation modernization is available here.

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