Tuesday, March 16, 2010
| Make Florida More Hurricane-Resistant
published: Sep 28, 2009
by: Eli Lehrer and John Hallman
As hurricane-ridden September passes by, much of the news in Florida appears good: Hurricanes, so far, have stayed away from U.S. coastlines, the Legislature has passed a few common-sense reforms to the state's property insurance system and state CFO Alex Sink says that the state's troubled Hurricane Catastrophe Fund (Cat Fund) has gained a firmer fiscal footing. more... |
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| A catastrophe waiting to happen
published: Sep 15, 2009
by: Jonathan Orszag
This month marks the fourth anniversary of Hurricane Katrina. That raises a simple question: Are we prepared as a Nation for the next mega-catastrophe (one, perhaps, worse than Katrina) that will inevitably strike our country? more... |
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| The Meltdown Next Time: The financial danger nobody knows about.
published: Sep 12, 2009
by: Eli Lehrer
When the insurance giant American International Group was threatened with collapse in late 2008, its credit default swap business and other international operations were cited as the heart of its troubles. But the largest consequence of AIG's uncontrolled failure on consumers' pocketbooks could have come from the domino-like collapse of its businesses writing insurance on boats, cars, homes, lives, and just about everything else. If these businesses fell apart as a result of AIG's overall collapse, the argument went, the contagion could have brought a collapse of everything from retirement savings plans to auto insurance claims payments from companies unconnected to AIG. (In theory, the operations were firewalled from AIG's other operations, but the extremely slow rate at which they've found buyers indicates that many had significant exposure to the company's other woes.) more... |
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Insurers require national oversight and supervision |
by: Rep Ed Royce and Rep Melissa Bean
published: May 19, 2009
Sir, readers of Eric Dinallo's opinion piece, ''Marriage, not dating, is the key to healthy regulation'' (April 27), should be reminded that the author is a state insurance commissioner. For nearly 140 years, those with an interest in preserving the status quo have fought against regulatory modernisation to protect their bureaucracies. The lack of a national regulator, focused on the national economy, has proven costly. The US government, through the troubled asset relief programme and Federal Reserve, has committed nearly $200bn to AIG, with assets of over $1,000bn. The Treasury is also prepared to inject $22bn to insurers under Tarp. The federal government has never been so invested in an industry it has no regulatory authority over. Leaving the business of insurance regulation to various state insurance commissioners while the federal government provides taxpayer-funded assistance is irresponsible.
We introduced the National Insurance Consumer Protection Act to create a national insurance regulator with the resources and authority to regulate insurance companies whose breadth and scope far exceed the capabilities of the state-based system. This regulator will not only monitor insurance subsidiaries, but also the activities of the holding company and non-insurance affiliates, such as AIG's financial products unit. The regulator would have the authority to restrict the very ''regulation shopping'' that some have labelled a primary cause of the banking crisis.
State regulators such as Mr Dinallo often choose to skate past the many disadvantages to consumers under the current system. Unnecessary duplication of regulation leads to billions of dollars of extra costs each year, ultimately borne by the consumer.
Despite Mr Dinallo's misleading attempt to portray Tim Geithner as an opponent of insurance regulation reform, the Treasury secretary, Fed chairman Ben Bernanke and myriad studies have all pointed to the need for national supervision and oversight of insurers.
Ed Royce,
California (Republican)
Melissa Bean,
Illinois (Democrat),
Washington, DC, US
Copyright The Financial Times Limited 2009
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