NU Online News Service, June 12, 3:51 p.m. EDT

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WASHINGTON–Treasury Secretary Timothy Geithner willoutline the thinking behind the Obama administration's regulatoryreform proposals Thursday in rare consecutive hearings before theSenate and House financial services committees.

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The hearings will follow the expected unveiling of theadministration's plan to reform regulation of the financialservices industry on Wednesday, by Laurence Summers, chairman ofPresident Obama's National Economic Council.

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Actual legislation is not expected to be introduced, first inthe House, for several weeks.

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In comments today foreshadowing a debate that is expected to belengthy, Mr. Summers described the details as "mind-numbinglycomplex."

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The Senate Banking Committee will go first, holding a hearing inthe morning in a large, rarely-used hearing room in the Hart SenateOffice.

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At 1:30 p.m., Secretary Geithner will again outline theadministration's proposals in testimony before the House FinancialServices Committee.

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The two hearings will conclude a hectic week of hearings onfinancial services issues.

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Tuesday, the Capital Markets Subcommittee will hold a hearing onsystemic risk and insurance.

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Included in those testifying will be Peter Skinner, a member ofthe European Parliament from the United Kingdom.

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Also testifying will be representatives of the NationalAssociation of Insurance Commissioners, bond insurers, theReinsurance Association of America, the National Association ofMutual Insurance Companies, the American Council of Life Insurersand the American Insurance Association.

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Earlier this week, representatives of the Independent InsuranceAgents and Brokers of America and the National Association ofMutual Insurance Companies sent letters to Mr. Summers and othermembers of the Obama administration asking them to retain stateregulation of insurance.

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In his letter, Robert Rusbuldt, president and chief executiveofficer of the IIABA, asked the administration to oppose anyregulatory reform or financial services restructuring efforts "thatcould imperil the strength and stability of the state system ofinsurance regulation."

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Mr. Rusbuldt said in his letter that the "administration facesmany challenges as it considers how to improve and strengthen thecurrent financial services regulatory regime, but the success ofstate insurance regulation – especially in recent months – offers avivid reminder of that system's benefits."

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He noted that members of the IIABA "strongly oppose displacingeffective regulation with deregulation and an unproven regime thatcould be harmful to consumers, such as through current proposals toallow for an optional federal charter for insurance."

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Similarly, Charles Chamness, president and CEO of NAMIC, saidthat although property/casualty insurance industry investmentportfolios have suffered as a result of the financial crisis, "ourindustry is solvent, secure, and fulfilling its commitments topolicyholders."

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Mr. Chamness said, "With conservative and liquid investmentportfolios, low leverage ratios, strong solvency regulation asmandated by state laws, and a highly competitive and diversemarketplace, the property/casualty insurance industry stands out asan island of stability in a sea of financial services turmoil."

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He explained, "The relative strength of the industry in thesedifficult times demonstrates the effectiveness of the currentsystem.

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"It stands to reason that this model should not be disrupted orsuperseded through the creation of dual or mandatory federalregulatory models," Mr. Chamness concluded.

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