Eric Dinallo - Snippets

  • 2008 0924 - propertycasualty360.com - NAIC Members: AIG Mess Is Not Our Fault, By James Connolly - [link]
    • The nation's insurance commissioners meeting here asserted that state regulation has ensured the solvency of carriers including insurance subsidiaries of financially challenged American International
    • AIG has raised the concerns of many insurance consumers. Mr. Dinallo said that in the first two days following the AIG crisis, his department received over 1,000 calls concerning AIG contracts.
  • (p46) - John F. TIERNEY (D-MA) - Let me follow up on that, Mr. Dinallo.
    • The State-regulated insurance subsidiaries remain solvent and able to that pay their claims, correct?
  • Eric DINALLO, New York State Superintendent of Insurance - Yes, sir.

 GOV (House-OGR) - The Causes and Effects of the AIG Bailout- AIG Bailout Oversight Hearing, Henry Waxman (D-CA)  ---  [BonkNote]

  • (p54) - 1:34-1:41 - Bruce BRALEY (D-IA) - Mr. Dinallo, I want to start with you.
    • Twenty-five years ago,I was a research assistant to Professor Alan Whitus, who was updating the Keeton and Whitus basic text on insurance law; and I think both Professor Whitus and Professor Keeton would be rolling over in their graves seeing what has happened to the industry that they were so passionate about.
      • I think you would agree with me that industry has changed radically in the 25 years that I’ve been talking about.
  • Eric DINALLO, Superintendent, New York State Insurance Department - Yes. In particular going from mutual companies to publicly traded companies.
  • Mr. BRALEY. And a lot of those demutualizations resulted in a significant financial loss to policyowners who owned the shares of those mutual companies—who owned the mutual companies and during the conversion in many cases were screwed out of their financial share of those companies.
  • Mr. DINALLO. I might not use the same verb, but I will agree.
  • Mr. BRALEY. I think you get my point.
  • (p54) - 1:34-1:41 - Eric DINALLO, Superintendent, New York State Insurance Department - Well, I think it’s important for everyone to know there’s a very strong tension between policyholders’ interest and shareholders’ interest in a publicly traded company.
    • The board and management has a fiduciary interest to shareholders under our law, fiduciary interest to shareholders, but, at the same time, whenever they release capital to satisfy that to get a bigger return on equity, they are necessarily taking incremental protection against policyholders.
  • Bruce BRALEY (D-IA) -  And you also have a fiduciary obligation to policyholders under their contractual obligation with the policyholder.
  • Mr. DINALLO. Sadly, there is some debate, actually, because they’ve been so trained under our law and after Enron, etc., to worry about fiduciary duty to shareholders that there is a good argument that, although it’s in their blood to worry about policyholders, the legal requirements are a little bit gray, actually.

 GOV (House-OGR) - The Causes and Effects of the AIG Bailout- AIG Bailout Oversight Hearing, Henry Waxman (D-CA)  ---  [BonkNote]

  • Mark SOUDER (R-IN). If I was trying to go through the different guarantee funds and so on, if insurance companies would start to need to be rescued, do you have a fee much like do we for FDIC——
  • Eric DINALLO (New York State Superintendent of Insurance. Yes.
  • Mr. SOUDER. And others like the insurance companies would kick in?
  • Mr. DINALLO. Yes, we have what’s called a guarantee fund.
  • Mr. SOUDER. Do you have right now—......
  • Mr. DINALLO. Yes.

GOV (House-OGR) - The Causes and Effects of the AIG Bailout- AIG Bailout Oversight Hearing, Henry Waxman (D-CA)  ---  [BonkNote]

  • (p54) - 1:34-1:41 - Bruce BRALEY (D-IA) - Mr. Dinallo, I want to start with you.
    • Twenty-five years ago, I was a research assistant to Professor Alan Whitus, who was updating the Keeton and Whitus basic text on insurance law; and I think both Professor Whitus and Professor Keeton would be rolling over in their graves seeing what has happened to the industry that they were so passionate about.
    • I think you would agree with me that industry has changed radically in the 25 years that I’ve been talking about.
  • Mr. DINALLO. Yes. In particular going from mutual companies to publicly traded companies.
  • Mr. BRALEY. And a lot of those demutualizations resulted in a significant financial loss to policyowners who owned the shares of those mutual companies—who owned the mutual companies and during the conversion in many cases were screwed out of their financial share of those companies.
  • Mr. DINALLO. I might not use the same verb, but I will agree.
  • Mr. BRALEY. I think you get my point.
  • Mr. DINALLO. Well, I think it’s important for everyone to know there’s a very strong tension between policyholders’ interest and shareholders’ interest in a publicly traded company.
    • The board and management has a fiduciary interest to shareholders under our law, fiduciary interest to shareholders, but, at the same time, whenever they release capital to satisfy that to get a bigger return on equity, they are necessarily taking incremental protection against policyholders.
  • Mr. BRALEY. And you also have a fiduciary obligation to policyholders under their contractual obligation with the policyholder.
  • Mr. DINALLO. Sadly, there is some debate, actually, because they’ve been so trained under our law and after Enron, etc., to worry about fiduciary duty to shareholders that there is a good argument that, although it’s in their blood to worry about policyholders, the legal requirements are a little bit gray, actually.

GOV (House-OGR) - The Causes and Effects of the AIG Bailout- AIG Bailout Oversight Hearing, Henry Waxman (D-CA)  ---  [BonkNote]

  • I realized, there was nobody else.
  • There was no one for me to get help on this. This was it.
    • I'm in the room.
      • Geithner's asking.
      • Paulson's listening. 
  • I finally had no one else to ask.
    • I mean, my experts obviously.
  • But it was one of those moments in life where you're like, "Okay, this is it. You're either going to get this right, or you're going to get it wrong.
  • There's no one else to go and chat with about it...

2021 0225 - Yale - YPFS Lessons Learned Oral History Project: An Interview with Eric Dinallo, Former New York State Superintendent of Insurance (2007-2009)  ---  [BonkNote]  ---   19p