Orderly Resolution Authority

  • AIG’s problems “highlight the need for a resolution authority with the power to manage the orderly restructuring of a large, complex, non-bank financial institution that poses a threat to the stability of our financial system,” Geithner said.

2009 0324 - ThinkAdvisor - Geithner To Ask For More Powers, By Arthur D. Postal - [link] 

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  • (p7) - Joseph TORTI, NAIC, Deputy Director and Superintendent of Insurance and Banking, Rhode Island Department of Business Regulation:
    • I hope I understand your question. Are you saying as a result of the Dodd-Frank changes that have been made, what would be done differently?
  • Al GREEN (D-TX) - How would the States respond to the FDIC handling exigent circumstances comparable to AIG during the financial crisis?
  • Mr. TORTI. The traditional way that we would handle that type
    of thing is we try to create a wall around the insurance entity to
    protect the insurance entity and the insurance entity’s policyholders from those circumstances so that the insurance policyholders and claimants aren’t made to pay for the problems outside the insurance entity.

    • That is normally the way that we protect an insurance entity in a receivership situation.
    • So if there were a holding company issue or a significant affiliate outside of the insurance entity that had financial difficulties, we would protect the insurer from those financial difficulties through the current receivership laws that we have in all the States.
  • Mr. GREEN. In essence, are you saying that you would be able
    to work within the confines of Dodd-Frank and with the FDIC so
    as to perfect an orderly liquidation?
  • Mr. TORTI. We really hope we don’t end up in that situation again.
  • Mr. GREEN. Obviously, yes, I concur.
  • Mr. TORTI. But, yes, we believe we should be able to work with
    the FDIC.

    • We are hopeful that we will be able to work with the FDIC.
    • We have a very good relationship with the FDIC.
    • The FDIC has acknowledged that protection of the policyholders and claimants of the insurance entity is of utmost importance to us, and we believe that we should be able to work with them on that type of circumstance.
  • Mr. GREEN. Are there any technical changes to the draft we have
    that you would recommend to help to facilitate this?
  • Mr. TORTI. I can’t think of any technical changes that I would offer to the current draft that you have, no.

2011 1116 - GOV (House) - Insurance Oversight and Legislative Proposals, Judy Biggert (R-IL) - [PDF-131p - VIDEO-?]