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Insurance
and Reinsurance Law Alert
June
18, 2009
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Insurance and
Reinsurance
Practice Group
Leaders
Contributors
(Government and Public Affairs Group)
Daniel
R. Beattie
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INSURANCE INDUSTRY ALERT
DEPARTMENT OF TREASURY
ANNOUNCES THE WHITE HOUSE'S PROPOSALS FOR FINANCIAL REGULATORY REFORM
WHICH HAVE A SIGNIFICANT IMPACT ON THE REGULATION OF INSURANCE
On June 17, 2009, the
Department of the Treasury announced a summary of legislative
proposals outlining the Obama Administration's sweeping reform of the
financial services industry. Of importance to the Insurance
industry, the proposal describes the establishment of a new
administrative agency, the Office of National Insurance within
Treasury. The Office of National insurance would be tasked with
developing a "modern regulatory framework for
insurance." The Treasury's six principles of insurance
regulation are:
1. Effective
systemic risk regulation with respect to insurance;
2. Strong
capital standards and an appropriate match between capital allocation
and liabilities for all insurance companies;
3. Meaningful
and consistent consumer protection for insurance products and
practices;
4. Increased
national uniformity either through a federal charter or effective
state action;
5. Improve and
broaden the regulation of insurance companies and affiliates on a
consolidated basis, including those affiliates outside of the
traditional insurance business; and
6. International
coordination.
While many of the Administration's
proposals are consistent with prior proposals by segments of the
insurance industry, others seem to substantially extend the reach of
federal regulatory authority.
The Administration has
expressed the ambitious desire to enact the legislative proposals set
forth by the Department of the Treasury by the end of 2009. We
expect vigorous debate in Congress over the coming months.
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The
Insurance and Reinsurance Law Update has been prepared by Clark Hill
PLC for informational purposes only and does not constitute legal
advice. This information is not intended to create and receipt
of this information does not constitute a lawyer-client
relationship. Readers should not act upon this without seeking
advice from professional advisors.
Federal
Tax Advice Disclaimer: Under U.S. Treasury Regulations, we are
informing you that, to the extent this message includes any federal
tax advice, this message is not intended or written by the sender to
be used, and cannot be used, for the purposes of avoiding federal tax
penalties.
For further information about the content of
this Insurance Law Update, please contact Benjamin
Blume at 312-985-5937 or John
LaBarbera at 312-985-5936. To find out more about Clark
Hill and our Insurance and Reinsurance Law team, visit clarkhill.com
or call 800.949.3124
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