Financial Services Reform and Insurers

Introduction of the Restoring American Financial Stability Act of 2010 by Senate Banking Committee chairman Christopher Dodd (D-CT) yesterday has prompted a slew of headlines on financial services reform and the pros and cons of giving enhanced powers to the Federal Reserve Board. Apart from the establishment of an Office of National Insurance within the Treasury, there are a couple of key takeaways from the insurance industry perspective. On systemic risk: the proposed legislation would establish 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. The plan would also create a $50 billion fund, financed by assessments on the largest financial firms, including insurers. Check out the following articles in the New York Times, Business Insurance and Insurance Networking News for more on this story. The American Insurance Association issued the following statement, here,  in response to the legislation. Check out I.I.I. information on regulation modernization.

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