President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law today.
Many of the prime actors in shepherding the bill into law, including House Financial Services Committee Chairman Barney Frank (D.-Mass.) and Senate Banking Committee Chairman Christopher Dodd. (D.-Conn.), joined the President onstage at the Ronald Reagan Building for the signing ceremony.
Representatives of the insurance industry evinced conditional praise for the new law, which creates a Federal Insurance Office housed within the Treasury Department. While largely pleased that insurers were not deemed to present a systemic risk, and thus largely excluded from many of the law’s most censorious provisions, some trepidation about the potential impact on the broader financial system remains.
“While the Big ‘I’ did not endorse the legislation, we do appreciate the improvements made to the FIO during conference negotiations that were ultimately signed into law,” Charles Symington, SVP of government affairs for the Independent Insurance Agents & Brokers of America said in a statement. “We were also pleased with the inclusion of the ‘Nonadmitted and Reinsurance Reform Act’ in the overall package, which is a perfect example of the appropriate way to modernize insurance regulation: targeted federal legislation to improve the state system without creating a federal regulator.”
Leigh Ann Pusey, president and CEO of the American Insurance Association, noted that insurers must to remain vigilant during the law’s rule-making phase.
“As we shift our focus to implementation, it will be our goal to continue to reinforce the distinctions between insurance and other financial services,” she said. “The new law recognizes this in many important areas, including leaving insurance in the existing state-based resolution mechanism and continuing the state guaranty fund system. It will be important in the months ahead to work with Treasury and other federal regulators to ensure the implementing regulations and related rule-making are consistent with the legislative intent.”
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