The NAIC leadership is paying close attention to the insurance industry market and policyholder environment landscape in the wake of future systematically important financial institution (SIFI) designations, (a requirement of the Dodd Frank Consumer Protection Law) its leadership made clear today during an insurance regulatory conference here in Washington.
There could be “unintended consequences" of the SIFI designation, said NAIC president and Florida Insurance Commissioner Kevin McCarty.
“What Mark [Grier] said was very important,” Vaughan said.” We are in a business that [can pay out] in 50 years. People put their money in and don’t expect t back right away. Consumers are really very interested in solvency, and financial strength is a competitive advantage,” Vaughan said.
The concern is that you create a system where consumers go to the perceived stronger companies disproportionately to real market risk, Vaughan and McCarty agreed.