FOR IMMEDIATE RELEASE
NAIC PRESIDENT GIVES CONGRESS INSURANCE
PERSPECTIVE ON FEDERAL CAPITAL RULES
NATIONAL HARBOR, Md. (Nov 29, 2012) — The National
Association of Insurance Commissioners (NAIC) today raised concerns
regarding the proposed application of “one size fits all” capital rules on
thrift and bank holding companies predominately engaged in insurance
activities. NAIC President and Florida Insurance Commissioner Kevin
M. McCarty testified on behalf of U.S. insurance regulators before a joint
subcommittee hearing of the House Financial Services Committee.
“The prospect of bank-centric regulatory rules being imposed on
insurance groups is problematic,” stated McCarty. “It is critical that the
regulatory walls around legal entity insurers that have successfully
protected policyholders for decades not be jeopardized.”
The NAIC has submitted comments to the Federal Reserve, Federal Deposit
Insurance Corporation and Office of the Comptroller of the Currency on
proposed capital requirements to be applied to thrift and bank holding
companies. McCarty's testimony reinforced that dependence on capital
standards at the expense of other regulatory tools will not sufficiently
prevent companies from taking excessive risks.
“We fear the same overreliance on capital could become a reality in our
sector, with no diversity of regulation to mitigate the wrong incentives or
prevent systemic risk taking. The existence of global capital
standards in the banking sector did not prevent the last crisis and did
little to prevent large institutions from becoming larger while chasing
each other off their own fiscal cliff,” testified McCarty.
The hearing, titled “Examining the Impact of the Proposed Rules to
Implement Basel III Capital Standards” was an opportunity for financial
regulators to address concerns with the proposed rules. The subcommittee
heard testimony from a number of financial regulators in addition to
McCarty. A second panel included industry representatives who would be
impacted by the proposed rules.
for the full text of the testimony.
for the NAIC comment letter.
for more information on the Government Relations Leadership Committee.