New York Gov. Eliot Spitzer signed an executive order todaynaming State Insurance Superintendent Eric Dinallo to chair a newlycreated commission to identify ways New York can “retain andenhance” its world financial capital status.

“The financial world has changed, and we must change with it toretain ourleadership position,” Governor Spitzer said in astatement.

He said the panel will help thestate bring its regulatorystructure into the 21st Century, “encouraging the use ofcutting-edge technology and techniques to provide capital,insurance and other services to companies and individuals aroundthe country and the globe.”

The New York State Commission to Modernize the Regulation ofFinancialServices, which will include representatives fromindustry, consumer groups and government, will review all currentfinancial services statutes, regulations, rules and policies, andpropose legislative and other necessary changes.

The commission is charged with making recommendations foradministrative and legal reform by June 30, 2008.

Mr. Dinallo said: “Current laws and regulations in New York donot work forthe industry or the consumer. Financial servicescompanies claim that theyface unnecessary regulatory hurdles inbringing new products to market.Consumer advocates claim thatpublic awareness about the risks and costs ofwhat are fundamentallythe same financial products can vary depending upon the stateagency that is doing the regulating.”

He said the state must develop new laws and regulations that“promote competition and the growth of business whileeffectivelyprotecting both consumers and honest businesses from unfairorunethical practices.”

Four separate New York state agencies–the Insurance Department,the BankingDepartment, the Department of State and the AttorneyGeneral's Office–all regulate the financial services industry.

The governor's announcement noted that this regime of stateregulation was created at a time when federal laws (such as the nowrepealed Glass-Steagall Act) restricted the commercial activitiesof financial services firms, financial markets were fragmented andlargely national rather than global in scope, and the activities ofbanks, insurancecompanies and securities firms were clearlydistinguishable.

The commission will be charged with identifying ways in whichregulatorypowers could be integrated, rationalized and changed inorder to promote economic innovation and protect the consumer.

The commission will have members appointed by the governor,including: the superintendent of banks, the secretary of state, thechairperson of theConsumer Protection Board and the attorneygeneral; the chairs of theAssembly and Senate Banking and InsuranceCommittees; and additionalmembers appointed by the governor,including representatives of theinsurance, banking and securitiesindustries, other business leaders and consumer groups.

Insurance industry members of the commission will includeHerbert M. Allison Jr., chairman, president and chief executiveofficer, TIAA-CREF; Christopher M. Condron, chairman and CEO, AXAEquitable; C. Robert Henrikson, chairman president and CEO,MetLife; and Martin J. Sullivan, CEO, American InternationalGroup.