Testifying before the House Small Business Committee, J. Douglas Robinson, chairman and CEO of Utica, N.Y.-based Utica National Insurance Group, said efforts to rein in the excesses of Wall Street firms might adversely impact smaller insurance companies.
“Simply put, we need to fix what’s broken, not what is working,” Robinson testified. “The Wall Street meltdown was caused primarily by large, highly leveraged businesses. To fix these behemoth, “too interconnected to fail” firms, policymakers need to avoid costly one-size-fits-all regulations that would undermine firms that provide the small business community access to capital and protection from risk.”
Speaking on behalf of the Property Casualty Insurers Association of America, Robinson urged the Obama Administration and Congress to target regulatory reforms toward where the problems occurred, rather than painting with a broad brush.
Specifically, Robinson charged the proposed new Office of National Insurance (ONI) is given too much subpoena and preemption power with inadequate due process or limits on its scope and its ability to enter into international insurance agreements. He also suggested that bank regulators should not be allowed to resolve systemic risk failures by reaching into the assets of insurance affiliates.
“The costs of new regulations almost always disproportionately affect small business,” Robinson said. “The property-casualty industry is healthy and competitive, and the current system of regulating the industry at the state level is working well. Home, auto and commercial insurers have been stable throughout the financial crisis, we specifically rejected a government bailout, and we do not need additional regulation.”
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