The insurance regulators of New York and Bermuda announced today they had signed an agreement allowing for cooperation between their organizations. Both said the need for the pact had been underscored by the financial turmoil at American International Group.
Signing the memorandum of understanding were New York State Insurance Superintendent Eric Dinallo and Matthew Elderfield, chief executive officer of the Bermuda Monetary Authority.
The memorandum, it was explained, establishes a formal basis for consultation, cooperation and coordination between BMA and the New York State Insurance Department (NYSID) and provides for the exchange of information relevant to each authority's supervisory, regulatory and examination responsibilities.
"In light of the increasing globalization of insurance markets, regulators need to cooperate with one another in order to provide proper oversight and protection," Mr. Dinallo said in a statement.
"Bermuda and New York are among the leading centers of the insurance industry, and our willingness to cooperate as evidenced in this arrangement demonstrates our commitment to effective regulation. Indeed, we have recently been working together to protect AIG policyholders worldwide, and this arrangement formalizes the coordination and cooperation between us," he said.
AIG, facing a liquidity crisis, was forced to obtain a U.S. government loan for $85 billion.
Mr. Elderfield said "the two agencies' most recent collaboration on firms within the financial guaranty sector impacted by subprime and matters related to AIG has underscored the need to ensure regulators can cooperate quickly and effectively in the global insurance market."
Under the agreement, either regulator may request assistance from the other, including obtaining information on a regulated person or entity. Either regulator may provide the other with investigative assistance with respect to companies and persons engaged in the business of insurance, including questioning or taking testimony and conducting inspections and investigations, the announcement said.
The New York announcement of the agreement noted that the New York Department had entered into similar memorandums of understanding with the insurance regulators of Germany and Taiwan, and is close to executing arrangements with other regulatory authorities.
Negotiating the memorandum for the NYSID were Deputy Superintendent and General Counsel Robert Easton and Supervising Attorney D. Monica Marsh. For the BMA, negotiations were handled by Director of Legal Services and Enforcement William Kattan and Legal Counsel Dina Wilson.
The Bermuda Monetary Authority, (BMA) which regulates the financial services sector in Bermuda, was established under the Bermuda Monetary Authority Act 1969. It supervises, regulates and inspects financial institutions operating in or from within the jurisdiction. The BMA has statutory responsibility for the supervision and regulation of financial institutions including insurance companies and insurance intermediaries in Bermuda.
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