Financial Regulatory Reform

The Wall Street Journal’s Washington Wire blog, among many others, tips us off that President Barack Obama will be speaking at Cooper Union in New York City tomorrow on financial regulatory reform. The president’s address comes on the same day that the Senate is expected to begin debate on the regulatory overhaul plan and according to White House press secretary Robert Gibbs the president “will call for swift action† on the package. The Restoring American Financial Stability Act of 2010, which passed the Senate Banking Committee in March and was drafted by committee chairman Christopher Dodd (D-CT), has a number of implications for insurers, not all of them good, according to industry experts. The key takeaways are as follows: the establishment of an Office of National Insurance within the Treasury; the streamlining of regulation for surplus lines insurers; the establishment of a Financial Stability Oversight Council that would subject to Fed oversight any nonbank financial companies that pose risks to the financial stability of the United States; and the creation of a $50 billion resolution fund, financed by assessments on the largest financial firms, including insurers. The House passed its version of financial services regulatory reform last December. Insurance Information Institute (I.I.I.) president Dr. Robert Hartwig  has suggested  that subjecting insurers to bank style regulation would be   counter-productive. Check out I.I.I. information on regulation modernization.

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