WASHINGTON–Treasury Secretary Henry Paulson Jr. said yesterday the Bush administration's "blueprint" for modernizing the U.S. financial services industry will address "the important role that insurance can play in today's interconnected financial markets."
The comment during a question-and-answer session following Secretary Paulson's speech at the annual Chamber of Commerce Capital Markets Summit was immediately lauded by the American Insurance Association.
Secretary Paulson was not specific as to when the so-called Blueprint for Regulatory Reform" will be released. He said it will propose a financial regulatory framework "which we believe will more effectively promote orderly markets and foster financial sector innovation and competitiveness."
In a statement released after the speech, AIA President Mark Racicot "commended" the secretary for his comments.
The AIA and the American Council of Life Insurers are among the industry trade groups supporting legislation creating an optional federal charter for insurers.
The Financial Services Roundtable, whose members include several large life and property-casualty insurers, is also a strong supporter.
In a statement, Mr. Racicot also lauded the secretary for "recognizing the need to address the important role that insurance has in modern financial markets, as well as the need to include insurance in a modern regulatory system.
"We look forward to the release of Treasury's 'blueprint' for an improved U.S. regulatory structure in the coming weeks and are committed to ensuring that the debate is comprehensive and leads to meaningful reform," Mr. Racicot added.
Mr. Paulson said the near failure of investment house Bear Stearns 10 days ago underscores the need to bring investment banking companies under the same kind of federal oversight now confined to commercial banks.
"This latest episode has highlighted that the world has changed, as has the role of other nonbank financial institutions and the interconnectedness among all financial institutions," he said.
He said the problems will require all players in the markets to think more broadly about the regulatory and supervisory framework that is consistent with the promotion and maintenance of financial stability.
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