Financial Services Reform and Insurers

There are articles aplenty about the shape of landmark financial services reform agreed by House and Senate conference committees early Friday and what the impact will be on the insurance and reinsurance industry.

A good place to start is the Wall Street Journal which has a useful interactive showing what’s in the bill (H.R. 4173) for the government, for banks, for consumers and for investors.

An article on BestWire via speaks of optimism among property/casualty insurers that the final language in the bill recognizes that the p/c sector is not a factor in concerns over systemic risk and that it maintains the state guaranty fund system as the resolution authority for the sector.

On a not-so-positive note for the insurance sector, National Underwriter reports on how to offset the $19 billion cost of the bill a tax will be imposed on large financial institutions, including insurers, with more than $50 billion in assets. It quotes several insurance trade groups voicing concern over the levy.

Insurance and Financial Adviser observes that the bill retains most state-based regulation of insurance, even with the creation of a Federal Insurance Office. Under the provisions agreed, the Federal Insurance Office must first seek data from state insurance regulators before seeking information from insurance companies, it explains.

Business Insurance focuses on the aspects of the bill that address surplus lines modernization and streamlining of reinsurance regulation.

The bill is expected to be approved by both Houses of Congress this week and sent to President Obama for his signature before the July 4 Congressional recess, though several reports note that the death of Senator Robert Byrd (D-WV) could jeopardize this plan.

Check out the new I.I.I. policymakers Web site  for information on key issues affecting the insurance industry,  such as regulation modernization.

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