2017 1024 - GOV (House) - The Federal Government’s Role in the Insurance Industry - Duffy

  • 2017 1024 - GOV (House) - The Federal Government’s Role in the Insurance Industry, Sean Duffy (R-WI)  ---  [BonkNote]
    • [PDF-140p, VIDEO-YouTube] 
    • Schwarcz/Ross/Duffy/Capuano/Katharine Wade (NAIC/CT)
    • FIO
    • Daniel Schwarcz - 27p
    • 1:17 - Capuano - Madoff did things that were Illegal, AIG did not
    • House - Committee on Financial Services -  Subcommittee on Housing and Insurance
  • (p13) - Chairman Sean DUFFY (R-WI). And I wanted to look forward to legislative fixes, but before I do that I do want to take a look back. And Mr. Schwarcz had mentioned AIG.
    • But maybe I will go to Ms. Wade first.
      • When you look at AIG and the insurance aspect of AIG versus the holding aspect of AIG, did the insurance portion of AIG fail that was supervised by the— this—under our State insurance model?
      • Or did the holding company with financial products fail?
      • Do you know the answer to that?
  • Katharine WADE (NAIC - Connecticut Insurance Commissioner). It was the holding company related to the financial products.
    • So the Office of Thrift Supervision was the consolidated regulator for—for AIG at the time.
    • The States had identified this— the securities lending issues and were winding those down. It was the result of the derivatives, the financial products, that caused a liquidity crisis that resulted in AIG’s challenges during the financial crisis.
  • Chairman DUFFY. So just to repeat again, who was the regulator of the holding company of AIG.?
  • Ms. WADE. The Office of Thrift Supervision.
  • Chairman DUFFY. Now, are they a State insurance regulator?
  • Ms. WADE. No, and in fact State insurance regulators were preempted from addressing the issues that caused the—
  • Chairman DUFFY. And so the problems were not on the insurance side that was regulated by the State. Is that correct?
  • Ms. WADE. Correct.