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June 16, 2009 at 08:00 PM
WASHINGTON BUREAU — Insurance regulation would remain primarily at the state level under a new financial services regulatory strategy that President Obama plans to unveil Wednesday.
But the proposal would grant broad authority to the Federal Reserve Board to oversee systemically risky institutions. A “new regime” would be established “to resolve nonbank financial institutions whose failure could have serious systemic effects,” according to a white paper outlining the administration’s regulatory proposals.
The white paper says the Treasury Department would leave the door open for Congress to create a federal insurance regulatory system but would support “increased national uniformity through either a federal charter or effective action by the states.”
Obama is scheduled to unveil the financial services proposal in a speech in the East Room of the White House. After the briefing, Lawrence Summers, director of the National Economic Council in the White House, and Treasury Secretary Timothy Geithner will fill in the details for reporters.
Treasury will support proposals designed “to modernize and improve our system of insurance regulation in accordance” with the principles outlined for regulation of other financial services sectors, the white paper says.
The Obama administration also will work to create a Consumer Financial Protection Agency. In an op-ed that appeared in the Washington Post Monday, administration officials suggested that the agency would cover variable annuities.
In addition, the white paper calls for strengthening Securities and Exchange Commission and Federal Trade Commission financial services consumer protection programs.
