2017 1024 - GOV (House) - The Federal Government's Role in the Insurance Industry - Sean Duffy (R-WI)

  • 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.