NU Online News Service

SEATTLE--Looking to avoid a repeat of the problems that nearly took down American International Group, a regulator said insurance commissioners are looking to state legislators to provide authority to obtain information about a holding company's non-insurance entities.

Citing the fall of American International Group, Ann Frohman, director of the Nebraska Department of Insurance, said that while regulators are not seeking to regulate those non-insurance assets, they do need to be in a position to collect the information and make some determination if those assets can adversely affect the insurance entities.

This would then allow regulators to "have a discussion" about those assets with the holding companies in an effort to avoid the AIG debacle, Director Frohman said.

Her comments came during the NAIC Summer National Meeting held here.

"You can't stop failure," she said, "but we can catch things and change the thinking upstream."

Director Frohman also spoke to the NAIC's planned dealings on international issues with a new Federal Insurance Office (FIO), which will be established within the Treasury Department as part of financial services reform.

She said working with the FIO would be a positive step because the industry needs a single voice on insurance trade issues.

"We need their assistance; it does make a lot of sense," she said. "Our job is to educate [the FIO]."

NAIC President and West Virginia Insurance Commissioner Jane Cline said it is a "proud achievement" that insurance regulation has been left in the hands of the states in the wake of the Dodd-Frank bill. She added, though, that the industry can expect "much more engagement with our colleagues in D.C." with the creation of the FIO.

Special Reports /

Regulator Seeks Authority to Get Info on Non-Insurance Entities

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