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Friday, February 19, 2010

CRS Issue Statement on Insurance Regulatory Reform

Rawle O. King, Coordinator
Analyst in Financial Economics and Risk Assessment

The 111th Congress has shown interest in strengthening insurance supervision. Faced with rapidly changing economic conditions, U.S. insurance regulators and policymakers face a number of critical issues regarding the practices of all financial institutions—not just insurance. Congressional concerns stem partly from a perceived lack of adequate disclosure and inability of financial sector regulators to identify, in timely fashion, mounting risk in specific market sectors. Increased transparency could strengthen confidence in the integrity of financial transactions, thereby generating large and reliable transaction volumes resulting in more consistent overall liquidity.

Congress is considering post-crisis financial regulatory reforms that include the establishment of a new office within the Treasury Department to develop better information on insurance at the federal level and improve oversight of systemic risk. Congress is also considering ways to identify weaknesses in consumer financial protection and to streamline and modernize the statebased regulation of insurers, reinsurers, and surplus lines carriers.

Date of Report: January 22, 2010
Number of Pages: 3
Order Number: IS40332
Price: $7.95

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