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WASHINGTON, D.C. (July 18, 2013) - The following is a statement from Thomas B. Leonardi, Connecticut Insurance Commissioner, on the list of Global Systemically Important Insurers released by the Financial Stability Board (FSB). Leonardi represents state insurance regulators at the Financial Stability Committee at the International Association of Insurance Supervisors (IAIS).

The National Association of Insurance Commissioners (NAIC) recognizes the important work being conducted by the Financial Stability Board (FSB) to address systemic threats to the global financial system. Nevertheless, we are concerned that FSB's identification of globally systemically important insurers (GSIIs) today is premature to the extent it relies solely on the work of the International Association of Insurance Supervisors (IAIS).

The IAIS agreed on a quantitative methodology which produces a relative ranking of firms based on metrics thought to be relevant for determining systemic importance. However, in our view, the analysis conducted to date by the IAIS is not sufficient by itself to draw the conclusion that any or all of the firms on the list are GSIIs.

Further, we continue to believe that traditional insurance activities are not systemically risky. Therefore, we urged that a comprehensive comparison of GSIIs with proposed systemically important banks be conducted to assess the threat posed by potential GSIIs relative to financial firms in other sectors. In other words, understanding whether the most systemically risky insurer (by virtue of its nontraditional or noninsurance activities) is still less risky than the least systemically risky bank, is relevant before making a designation and recommending additional requirements that will bifurcate the market.

Despite having the largest number of GSIIs within our jurisdictions, U.S. state insurance regulators have little insight into the deliberations at the FSB, so it is unclear whether other information beyond the IAIS work was considered. Mitigating systemic risk is an objective all financial regulators share, but given the impact of this effort on financial firms and their customers and the potential for an unlevel playing field in otherwise competitive and healthy insurance markets, it is important to get this right.


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

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