TOP STORIES OF THE WEEK
Conn. Commissioner: No Apologies
For U.S. Regulatory System
stated. “While not perfect, our national,
state-based system has worked remarkably
well, even in the market downturn of 2001
and the financial crisis of 2008.”
One critical observation he has of Sol-
vency II is that it remains a work in progress
and “has not been tested in the real world.”
BY MARK E. RUQUET
CONNECTICUT’S top insurance regu- lator says the United States needs to “stop apologizing” for its regulatory
regime, stating that it has worked “
remarkably well” through troubled times.
Connecticut Insurance Commissioner
Thomas Leonardi joined Thomas
(PwC) financial-services regulato-
ry-practice principal, and Henry
Jupe, PwC insurance-practice
manager, in an hour-long PwC
webinar titled “Solvency II and the
Impact of Equivalence in the U.S.”
Leonardi called Solvency II
“a wonderful and much-needed
effort to modernize, admittedly, an out-
moded European regulatory regime.”
However, he was critical of those who are
campaigning to see Solvency II become the
“be all and end all of insurance regulation.”
While there are significant differences
in the way regulations are formulated in
the United States and Europe, the end re-
sults are the same: to ensure the solvency
of carriers, their ability to pay claims and
protection of consumers, Leonardi said.
“We in the United States need to stop
apologizing for our regulatory regime,” he
and conflict with one another,” said Leon-
ardi. “I do believe in the long-term objective
of global, regulatory convergence on an out-
comes basis, and one that protects consumers
and promotes stability.”
Meanwhile, an overwhelming majority
of insurance executives believe it is impor-
tant for the United States to pursue
equivalency with Europe’s Solvency
II regulation, a PwC survey found.
In a flash survey conducted
during the consulting firm’s
webinar, slightly more than 78
percent of the more than 150
attendees said they believe the
United States should pursue
equivalency under Europe’s new
financial-regulation modernization plan.
Close to 22 percent said the U.S. should
not pursue equivalency.
Solvency II, which is scheduled to take
effect in Europe on Jan. 1, 2013, would
impact any U.S. insurer doing business
in Europe. Equivalency would give U.S.
regulations the same weight as Solvency II.
Should European regulators find that
U.S. regulations are not equivalent to Sol-
vency II, said Sullivan, the biggest direct im-
pact would be that U.S. carriers would have
to put-up more capital to cover claims. NU
We in the United States need to
stop apologizing for our regulatory regime.
While not perfect, our national, state-
based system has worked remarkably well,
even in the market downturn of 2001 and
the financial crisis of 2008.”
“In the end, perhaps, I think the more
pertinent question is whether and when
the EU will be equivalent to the U.S., and
not the other way around,” Leonardi said.
However, he continued, not achieving
equivalence would have a negative impact
on the industry and consumers with international interests, making it ever more
important that equivalency be reached.
“I think it makes more sense for countries
to be assessed against international standards
and not have multiple regional-equivalence
assessments that could potentially overlap
Allstate Sues Goldman Sachs Over Mortgage-Backed Securities
BY CHAD HEMENWAY
ALLSTATE Insurance Co. has filed another lawsuit in New York State Supreme Court seeking to recover
investment losses on residential mortgage-backed securities.
A lawsuit filed Aug. 15 names Goldman
Sachs Group Inc. and alleges that the more
than $123 million in securities it bought
from Goldman from April 2006 to March
2007 were sold fraudulently.
In fact, according to the complaint, people
at Goldman called the mortgage-backed securi-
ties “junk,” “dogs,” “crap” and “lemons.” The
characterizations were recently made public in
governmental investigations, Allstate says.