Dinallo Signs U.K. Understanding Agreement

New York State Insurance Superintendent Eric Dinallo and Hector Sants, chief executive officer of the United Kingdom's Financial Services Authority said they have signed a memorandum of understanding allowing for closer cooperation between their two regulatory entities.

The memo establishes a formal basis for consultation, cooperation and coordination between the FSA, the UK's financial regulator, and the New York State Insurance Department, and provides for the exchange of information relevant to each authority's supervisory, regulatory and examination responsibilities, the announcement said.

"The increasingly global financial markets require that regulators communicate quickly and cooperate closely in order to operate effectively," Mr. Dinallo said in a statement.

He added that, "London and New York are recognized as being the world's leading financial centers. The world watches what we do, and this arrangement emphasizes our awareness of our responsibilities to the global insurance market.

"The FSA and the department have demonstrated, most recently through our work on monolines and during the current financial crisis, that international cooperation is essential to protect policyholders and provide the security that is fundamental to the industry's success."

It was explained that under the memo 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 agreement commits the United Kingdom and New York regulators to cooperating with each other in the interest of fulfilling their respective regulatory mandates and functions.

New York's insurance department recently entered into similar agreements with the insurance regulators of Germany, Taiwan and Bermuda, and is close to executing arrangements with other regulatory authorities, the agency said.

The New York regulatory team negotiating the agreement included Robert Easton, deputy Superintendent and general counsel and Supervising Attorney D. Monica Marsh.

For the FSA, negotiations were handled by David Johnston, manager, London Market Insurers Team, and Richard Bennett of the General Counsel's Division.