NAIC Faults FSOC for Ignoring State Regulatory System
In a June 26 brief filed with the U.S. District Court for the District of Columbia regarding MetLife's case against the Financial Stability Oversight Council's (FSOC's) designation of the firm as a systemically important financial institution (SIFI), the National Association of Insurance Commissioners (NAIC) sided with MetLife in its efforts to force the FSOC to turn over relevant documents. The NAIC also faulted the FSOC for ignoring the state insurance regulatory system.
"It appears the FSOC largely ignored or discounted the state regulatory system and the views of state regulators and its own insurance expert in favor of speculation, assumptions about consumer and regulatory responses to distress that have no basis in fact or history and a flawed analysis of the insurance business and its regulation," the brief states. The NAIC pointed out that the state regulatory system also includes an early warning system to detect when companies are in trouble and has a mandated, orderly resolution process in place should insolvency occur.