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NAIC Statements on FSOC's Prudential Designation

9/20/13  Statement from Jim Donelon, NAIC President and Louisiana Insurance Commissioner

"I am deeply troubled by the implications of the Financial Stability Oversight Council's action designating Prudential as a systemically important financial institution. The justification for this designation shows fundamental gaps in FSOC's understanding of the business of insurance or the regulatory regime that governs it. More disturbing is the unknown consequences of such a designation and the potential disruption in the insurance marketplace. I commend Director John Huff for his thoughtful input on the Council. There were three dissenting views on this matter, including the two members on the Council with insurance expertise. It is unfortunate FSOC did not heed the concerns of those who know the business of insurance regulation best."

Read the dissent from Director John Huff

9/19/13 – Statement from Sen. Ben Nelson, NAIC CEO

“We understand Prudential was recently subject to a final designation by the Financial Stability Oversight Council that it is a systemically important financial institution. We are deeply grateful to have Director John Huff as the non-voting insurance regulator representative on FSOC and look forward to hearing his views on FSOC’s recent action. The NAIC will be studying the FSOC’s basis for its decision to determine the nature and extent of our response.  We continue to believe that traditional insurance activities do not pose a systemic threat to the financial system, and encourage FSOC to focus on highly leveraged, thinly capitalized, or unregulated activities of non-banks as it exercises its authority.” 

About the NAIC

As part of our state-based system of insurance regulation in the United States, the National Association of Insurance Commissioners (NAIC) provides expertise, data, and analysis for insurance commissioners to effectively regulate the industry and protect consumers. The U.S. standard-setting organization is governed by the chief insurance regulators from the 50 states, the District of Columbia and five U.S. territories. Through the NAIC, state insurance regulators establish standards and best practices, conduct peer reviews, and coordinate regulatory oversight. NAIC staff supports these efforts and represents the collective views of state regulators domestically and internationally. For more information, visit www.naic.org.

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