U.S. Rep. Paul E. Kanjorski (D-Pa.)'s House Financial Services Subcommittee on Capital Markets, Insurance, and Government Sponsored Enterprises, will again tomorrow Tuesday to puzzle out what the federal government needs to do to prevent future AIG blow-ups "from posing a systemic risk and threatening the American financial system."
Kanjorski and his fellow Democrats have been puzzling for months on how far the federal government should go in superseding or second-guessing the state regulators who failed to prevent the multibillion-dollar blow-up of American International Group and past failures like Reliance Group.
"It is now clear that we must restructure the federal government's role with regard to insurance oversight," Kanjorki said in a statement this morning. What's that mean?
1) Data - "At the very least" the federal government must have "a federal office, focused on collecting and analyzing insurance information" so Congress can "make better decisions regarding insurance policy matters."
2) Control - "We must also further examine the ultimate role of the federal government in overseeing insurers, insurance holding companies, and reinsurers. The bond insurance crisis, the near-collapse of American International Group (AIG), numerous insurers requesting TARP funding, and the need for mortgage insurers to obtain more capital to underwrite new business have all shown that insurance is both an important part of the national economy and certain lines may require more comprehensive and consolidated oversight."
Here's who the Hons. are grilling tomorrow:
i) The Honorable Peter Skinner, Member, European Parliament - How they do things over there
ii) The Honorable Michael T. McRaith, Director, Illinois Department of Insurance on behalf of the National Association of Insurance Commissioners - State regulators are against national regulation; it's an existential threat.
iii) Ms. Teresa Bryce, President, Radian Guaranty Inc. on behalf of the Mortgage Insurance Companies of America - Direct from Philadelphia. National insurers that have gotten in fights with states like the idea of national regulation.
iv) Mr. Sean McCarthy, Chief Operating Officer, Financial Security Assurance, Inc.
v) Mr. Kenneth F. Spence, Executive Vice President and General Counsel, Travelers
vi) Mr. Franklin Nutter, President, Reinsurance Association of America
vii) Mr. Patrick S. Baird, Chief Executive Officer, AEGON USA, LLC on behalf of the American Council of Life Insurers
viii) Mr. John T. Hill, President and Chief Operating Officer, Magna Carta Companies on behalf of the National Association of Mutual Insurance Companies