A regulatory lawyer raised concerns about a new proposed FDIC rule dealing with resolving troubled insurers that the federal agency believes constitute potential systemic risk to the financial system.
Francine L. Semaya, a New York-based insurance regulatory attorney, fears the proposed regulation is an example of how the Dodd-Frank Act will impose federal regulation on the business of insurance.
She noted that the proposed regulation says that state insurance law will continue to govern a financially troubled or insolvent insurance company, but at the same time only allows 60 days for the domiciliary regulator to seek a court order to resolve the financial issues facing such a company.
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