Rep. Waters Speaks Out Against Yet Another GOP Wall Street Gift
Congresswoman
"This week's gift is less oversight of the largest insurers in the
Waters explained that Dodd-Frank gave federal regulators oversight of the largest global insurers in the country because our state-based system of insurance regulation proved to be insufficient for these firms, which engaged in complex activities and posed significant risks to the economy. This includes negotiating international capital standards for companies like AIG,
"Today's bill is designed to undermine the progress we've made on this front, and to ultimately prevent the adoption of these capital standards in the
The full text of Waters' statement, as prepared for delivery, is below:
But no one should be surprised at what's taking place here. This is
AIG, as I mentioned, is a poster child of the financial crisis. It engaged in financial activities that more closely resemble investment banking than traditional insurance. Prior to the crisis, state regulators - which have primary jurisdiction over insurance companies - did not effectively account for AIG's activities related to credit derivatives or securities lending, for example, which allowed it to skate by with minimum capital. When AIG's bets on subprime mortgage-backed securities failed, it collapsed and required a taxpayer bailout. Recall that we bailed out AIG because it was a counterparty to nearly all of the largest global banks - meaning that if AIG failed, it would bring down a series of global megabanks with it.
So under Dodd-Frank, we improved the oversight of insurance companies by giving federal regulators the necessary tools to prevent another collapse of large, globally active insurance companies. We're talking about the big boys here: AIG,
However, today's bill is designed to undermine the progress we've made on this front, and to ultimately prevent the adoption of these capital standards in the
In fact, H.R. 5143 would add layers of burdensome red tape and unworkable requirements on our federal negotiators, making it virtually impossible for them to advocate effectively for
At worst, this bill is unconstitutional - something that the Administration detailed in its statement of policy - raising multiple conflicts between the President's exclusive authority on international agreements and the bill's requirements to directly include state insurance commissioners in international negotiations.
At best, this bill is a solution in search of a problem. It caters to an unfounded fear that internationally agreed upon policies would be forced upon small, domestic insurance companies and unwilling states.
Let me again reiterate that the standards being negotiated internationally are for the largest insurers that operate all over the world -- companies like AIG,
Second, states can never be compelled to adopt international standards such as these. These standards are nonbinding and each individual state has the discretion to adopt them, modify them, or reject them entirely after going through their full regulatory process.
Third, stakeholders have ample opportunity to weigh in on these discussions. For example, federal negotiators have held multiple sessions for stakeholders to provide input, and the
To make matters worse, the sponsor proposes to pay for the bill's costs by taking
As the veto threat issued by the
For these reasons, I would urge my colleagues to vote no on this bill.
Thank you, and I reserve the balance of my time.
30FurigayJof-5718284 30FurigayJof
Rep. Cummings Issues Response to Republican Plan to Repeal ACA
Rep. Luetkemeyer: House Passes Bill to Increase Transparency in International Regulatory Discussions
Advisor News
Annuity News
Health/Employee Benefits News
Life Insurance News