“When it comes to insurance, we, the states, are here to stay,” said Connecticut Gov. Dannel P. Malloy to attendees at the NAIC International Forum in Washington, D.C., today.
Malloy sought to turn the conversation about states versus federal regulation on its head by asking whether enough is being done in Washington to open up the door of opportunity for U.S. companies.
Malloy, whose appointed insurance commissioner Tom Leonardi is traveling on international insurance supervisory business, acknowledged that the state system has to “continuously evolve and consistently live up to the responsibility” of supervision, but expects to be nothing less than partners with the federal and international apparatus set up to also oversee insurers.
Connecticut is very active in international supervisory colleges overseeing insurance companies and Leonardi has made no bones about his distaste for the Federal Insurance Office (FIO) to join them.
Malloy made it clear he thoroughly backs the bold-speaking Leonardi. When asked by NAIC President Adam Hamm about what advice he would give to the three U.S. federal officials who sit on the G-20’s Financial Stability Board (FSB) about the lack of a state regulatory voice in global insurance supervisory deliberations at thee top level, Malloy answered, “Give up your seat to Tom and myself.”
The three FSB members are Treasury Secretary Lew, SEC Chair Mary Jo White and Federal reserve Chair Janet Yellen.
“We are wasting a lot of time and a lot of energy with a debate that has no chance of success, so let’s get to work and get it working for all of us,” he said to a room of European and U.S regulators and lobbyists.
Malloy said he takes his state as an insurance capital seriously, and means to supervise companies doing business in his state so risk “has no safe place to hide.”
Connecticut made a strong showing at the forum this year, with Kathy Belfi, director of financial regulation for the state insurance department speaking on best practices for supervisory colleges.
On Belfi’s wish list for future supervisory colleges are long term relationships with non-US supervisors and increasing the number of participants. Belfi would also like to see a more coordinated approach on target exams, she said.
The ascendance of corporate governance as a focus formed a large part of the panel discussions Tuesday. More questions keep arising and it will be a large part of reviews, of the IAIS’ ComFrame process and of just assessing other insurers, Belfi and non-U.S. regulators agreed.
It is part of “everything we think and do from now on,” said Vermont Insurance Commissioner Susan Donegan, who had just returned from Kuala Lumpur for the NAIC. Donegan even wrote a haiku on corporate governance during a panel discussion
“You know if there is a company failure, you know there re corporate governance failures,” said Christina Urias, a seasoned regulator on the state and international arena and now an insurance consultant for the IMF.
Whatever happens on the world stage with respect to international standards and reviews, Gov. Malloy stressed that the states will not be “dictated to.”
“We may get a set of regulations that we significantly embrace,” Malloy said, noting there was a lot of room for modernization but that the supervisory apparatus should go slower.
Author: Liz Festa