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WASHINGTON, March 11 -- The National Association of Insurance Commissioners issued the following news release:
In a letter to members of the U.S. Senate Banking Committee, the National Association of Insurance Commissioners (NAIC) applauded efforts by the committee to address the confusion associated with capital requirements applied to insurers under the consolidated supervision of the Federal Reserve. The letter cautioned Congress to preserve the walls around the legal entity insurers -- walls that have protected policyholders for more than 150 years.
"We have to be sure that the insurance assets don't prop up banks to the detriment of policyholders," warned Adam Hamm, NAIC President and North Dakota Insurance Commissioner. "Consent of the appropriate state regulator should remain a requirement for any capital transfer with the potential to affect policyholder protections. Individuals rely on insurance to protect their homes, livelihood and retirement. It is our job as regulators to safeguard that investment."
Reforms outlined in the Dodd-Frank Act gave consolidated supervisory authority to the Federal Reserve over thrift holding companies and systemically important financial institutions engaged in insurance operations. The letter supported potential changes to Dodd-Frank that would allow flexibility for the Federal Reserve to tailor holding company capital and leverage standards specific to the insurance business model. However, the NAIC raised concerns that the assets and capital held in the insurance legal entity must remain available to pay policyholder claims, and any changes should reflect that commitment.
The letter, signed by the officers of the NAIC, was sent in advance of a hearing by the U.S. Senate Banking Committee entitled "Finding the Right Capital Regulations for Insurers."
Click HERE to read the letter. http://www.naic.org/documents/committees_government_relations_140310_naic_letter_capital_standards_hearing.pdf
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