The Financial Services Roundtable is proposing creation of a federal financial regulator that would oversee the insurance industry along with other financial services sectors.
The board of the FSR, Washington, adopted the proposal Thursday and now is circulating the proposal to congressional leaders and Obama administration officials, according to Peter Freeman, an FSR vice president.
The FSR represents large, multinational financial services companies, including insurers and insurance holding companies such as Allstate Corp., Northbrook, Ill.; Prudential Financial Inc., Newark, N.J.; and Teachers Insurance and Annuity Association-College Retirement Equities Fund, New York.
President Obama indicated before he took office that his administration wants a legislative proposal unveiled before the Group of Twenty Finance Ministers and Central Bank Governors, popularly known as the G-20, starts its 2009 summit in London April 2.
The FSR proposal calls for the creation of a Financial Markets Coordinating Council to oversee 5 federal agencies. The panel would be an expansion of the Presidential Working Group on Financial Markets and would continue to play an advisory role without independent regulatory authority.
The Federal Reserve Board would be granted new powers to ensure the stability of the entire financial system, with the power to override other regulators.
Insurers would be regulated by a National Financial Institutions Regulator, or NIFR, that would merge national regulation of banks and thrifts, broker-dealers and investment companies, by combining the operations of the Office of the Comptroller of the Currency, the Office of Thrift Supervision and the Financial Industry Regulatory Authority.
The FSR plan also would expand the authority of the Federal Deposit Insurance Corp. to include insuring national insurers. The FDIC would become the National Insurance and Resolution Authority.
The insurance commissioner at the federal level would have supervisory authority not only of the insurance company but of the holding company as well, Freeman says.