When the oversight council in June named Prudential and AIG as " SIFIs, " it marked the first time in American history that federal government would directly regulate the solvency of state-licensed insurers as to all lines of insurance.
AIG willingly accepted its SIFI designation, but Prudential resisted, filing an unsuccessful administrative appeal before finally surrendering last week. The oversight council has also voted to subject MetLife to intensive scrutiny for possible designation.
This unprecedented assertion of power by the U.S. Treasury raises significant questions about federalism and insurance regulation, all of which can be distilled to one overarching concern: Who can best safeguard the solvency of entities insuring million of Americans? The 2010 Dodd-Frank financial reform law provides for designating certain "systemically important" insurers for enhanced supervision by the Federal Reserve Board. It is unclear what will be required of SIFI-designated insurers.
Why? Because the Fed hasn't finalized its proposed rules issued last year for exercising enhanced supervision over nonbank SIFI designees. On Sept. 18, Fed Chairman Ben Bernanke said the rules will be "tailored" for SIFI insurers, but he gave no specifics.
Ronald
Dwyer an independent insurance agent licensed in Michigan for Home - Auto –
Motorcycle - Watercraft - Business Insurance. He is also is
a Real Estate Agent working with buyers and sellers. He
can be reached at rondwyer@roninsureme.com or 248-390-6345. His real estate
website is http://www.dwyerproperties.com his insurance website is http://www.roninsureme.com or
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