NAIC Applauds Prudential’s De-Designation as SIFI

WASHINGTON, Oct. 17 -- The National Association of Insurance Commissioners issued the following news release:

The Financial Stability Oversight Council (FSOC) today removed the designation of The Prudential Insurance Company of America as a systemically important financial institution (SIFI). The National Association of Insurance Commissioners (NAIC) has consistently argued that the SIFI designation process as applied to Prudential was flawed.

"We applaud the Council's decision to rescind Prudential's designation. This action reflects a greater appreciation of the state insurance regulatory regime and enhancements made to our group supervisory tools," said Julie Mix McPeak, NAIC President and Tennessee Commissioner of Commerce and Insurance. "It also recognizes the work of the New Jersey Department of Banking and Insurance, as Prudential's group-wide supervisor, to implement those tools and apply them to its regulation of Prudential."

Established by the passage of the Dodd-Frank Wall Street Protection and Consumer Protection Act in 2010, the FSOC was established to identify and address systemic risks to the U.S. financial system. It is meant to bring together regulators from different industries to share perspectives, and identify and address threats across sectors. However, the state insurance commissioner representative to the FSOC is not a voting member.

"The rationale justifying the de-designation reflects a revised analytical approach that is consistent with the insurance business model and its regulation," said Eric A. Cioppa, NAIC President-Elect and Maine Superintendent of Insurance. "My predecessors have done an excellent job educating the Council on how insurance is regulated and the tools state insurance departments employ to address any potential risks. I look forward to continuing to represent state insurance regulators and working with my colleagues on the Council."

In September, state insurance regulators appointed Cioppa to a two-year term as the state insurance commissioner representative on the FSOC. Cioppa will represent the interests of the nation's state insurance regulators on the Council.

About the NAIC

The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer review, and coordinate their regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. NAIC members, together with the central resources of the NAIC, form the national system of state-based insurance regulation in the U.S. For more information, visit www.naic.org.