Recent Developments: The Federal Regulation Of Insurance

Originally published May 19, 2009

Congress and the Obama Administration continue to work on substantial regulatory measures to reform the regulation of the financial services industry, ranging from the oversight of credit default swaps to the formation of a systemic risk regulator and the possibility of federal regulation of insurance. Democratic Congressional leaders have vowed to pass major reform legislation before the end of the year, although the precise contours of such legislation remain unclear.

With respect to the federal regulation of insurance, the picture appears to be coming a little more into focus. Such regulation is likely to include some or all of the following: (1) a more comprehensive form of resolution authority for insurance holding companies and their subsidiaries; (2) oversight of insurance companies and their holding companies by a systemic risk regulator that, through its own authority, or through direction to other regulators, can compel