Wealth & Risk Management Blog

William Byrnes (Texas A&M) tax & compliance articles

New York Insurance and Banking: United at Last

Posted by William Byrnes on April 3, 2011


Why is this Topic Important to Wealth Managers? This topic discusses the new regulatory agency that will have an effect on most life insurance companies doing business in New York.  Because the new regulatory agency will oversee insurance and banking, it is likely that changes in the insurance compliance law are just around the corner.  After the financial crisis of 2008, it appears New York is taking action to prevent future disruptions in the market.  Wealth managers should be aware of the new agency as changes to insurance regulation and compliance are sure to result from the creation of this organization.

New York State is in the process of creating a new Department of Financial Regulation (DFR) which is designed to harnesses the regulatory powers and expertise of the Banking and Insurance Departments, as well as the Consumer Protection Board, by combining the functions of each, to make the State’s oversight of financial services responsive to the 21st century needs of the industry and its consumers.

This new State agency, created pursuant to legislation submitted as part of the 2011-2012 State Executive Budget, consolidates the functions, operations and staff of the Banking and Insurance Departments, along with related segments of the Consumer Protection Board, into a single State agency.

Consolidation of these agencies and activities within a single agency platform is intended to afford the State the ability to unify the State’s regulation of financial services and to more rapidly and capably respond to changing market practices and consumer preferences, thereby ensuring the industry’s continued integrity while shielding consumers from abuses.

In addition to enhancing and refining the State’s regulatory oversight of the industry, the consolidation will provide the State with the opportunity to reduce overall spending with the use of shared services.

The Superintendent of the Department of Financial Regulation will be appointed by the Governor, with the consent of the Senate. The Department’s main offices will be located in Albany and New York City.

The Department’s main responsibilities will be carried out through two major programs: regulation and consumer protection.  Read the analysis at AdvisorFYI

 

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