WASHINGTON (May 1, 2012) The Federal Deposit Insurance Corporation (FDIC) recognized state regulation of mutual insurance holding companies during an insolvency in a final rule issued this week, providing insurers with greater certainty and clarity, the National Association of Mutual Insurance Companies (NAMIC) said today.
“The FDIC’s final rule recognizes the reality of the marketplace and the intent of Dodd-Frank by recognizing mutual holding companies as insurance companies duly regulated by the states,” said Charles M. Chamness, president and CEO of NAMIC. “Property/casualty insurance companies, and especially mutual insurers, are designed to weather any financial storm, as we saw during the financial crisis. In the rare event of an insolvency, there are already mechanisms in place to ensure that policyholders are protected and claims are paid.”
The rule, which officially takes effect May 30, states that a mutual insurance holding company would be included under the definition of “insurance company” as defined by the Dodd-Frank Act. As such, mutual insurance holding companies would remain under the regulatory jurisdiction of the states, and would not be subject to the FDIC’s orderly liquidation authority created as part of the Dodd-Frank Act.
“Both of the namesakes of the Dodd-Frank Act specifically said it was not their intent for mutual holding companies to fall under the FDIC’s resolution authority, and this rule further solidifies that position,” Chamness said. “Trying to shoe-horn mutual holding companies into a resolution authority designed for banks would have only added a needless complication to an already difficult process.”
Contact: Matt Brady
Public Affairs Director
Posted: Tuesday, May 01, 2012 4:18:08 PM. Modified: Tuesday, May 01, 2012 4:18:43 PM.
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