The passage of the Dodd-Frank Act led to an increased role for federal financial regulators in regulating insurance companies. While insurance companies are still primarily regulated at the state level, certain insurance companies also qualify for federal regulation. For example, Dodd-Frank explicitly requires that the Federal Reserve Board (FRB) regulate all financial institutions designated as systemically important financial institutions (nonbank SIFIs) by the Financial Stability Oversight Council (FSOC). Currently, FSOC has designated two insurance companies as nonbank SIFIs: Prudential and AIG. The FSOC also designated …
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A Short-Lived Victory For MetLife Over SIFI Designation?
Frederick J. Pomerantz and Aaron J. Aisen, attorneys in Goldberg Segalla’s Global Insurance Services Practice Group, analyzed the recent decision that granted MetLife’s motion to remove the non-bank SIFI designation imposed by the Financial Stability Oversight Council (FSOC).
The decision marked the first time a SIFI-designated company challenged the designation, which the court overturned on three grounds all based on principles of administrative law. As Fred and Aaron write in their analysis for Law360, “The implications of this decision for MetLife and the insurance …
Continue ReadingFederal Judge Overturns MetLife’s SIFI Designation
In a first-of-its-kind decision, U.S. District Judge Rosemary M. Collyer of the U.S. District Court for the District of Columbia granted MetLife’s motion to remove the non-bank SIFI designation imposed by the Financial Stability Oversight Council (FSOC). This is a highly significant case, as it represents the first time a SIFI-designated company has challenged the designation. However, the order and opinion are currently under seal, possibly due to the inclusion of confidential and proprietary information on both sides. The parties have until April 6, 2016 …
Continue ReadingU.S. District Judge Explores the SIFI Designation Process
For the first time since the passage of Dodd-Frank, a U.S. District Judge is exploring the process by which the Financial Stability Oversight Council (FSOC) designates non-bank financial institutions as systemically important financial institutions (nonbank SIFIs). On February 10, 2016, U.S. District Judge Rosemary Collyer of the U.S. District Court for the District of Columbia heard arguments in the matter of MetLife v. FSOC.
In January 2015, MetLife filed a lawsuit challenging the FSOC’s designation of MetLife as a nonbank SIFI. Specifically, the lawsuit …
Continue ReadingOhio Brings Certificates of Insurance Closer to Home
Ohio recently passed House Bill 259, a law that aims to ensure that certificates of insurance accurately reflect the policies they represent. In the past, certificates that did not accurately reflect the insurance policy caused coverage disputes. The new measure attempts to cure this defect and gives the Ohio insurance regulator more jurisdiction to ensure that the certificate accurately reflects the policy — with one stated aim to protect agents and policyholders against insurance fraud. In passing this law, Ohio joins 24 other states …
Continue ReadingNew York Governor Andrew Cuomo Nominates New DFS Superintendent
Governor Andrew Cuomo has nominated Maria T. Vullo as the new Superintendent of the Department of Financial Services. If confirmed by the New York State Senate, she would replace Benjamin Lawsky who resigned as Superintendent in June 2015.
Ms. Vullo, an experienced litigator, is currently of counsel at Paul Weiss in its New York City office. She has over 25 years of litigation experience at the trial and appellate levels including at the United States Supreme Court and in U.S. Circuit Courts of Appeal around …
Continue ReadingNYDFS Has New Acting Superintendent
New York State Governor Andrew Cuomo recently named Shirin Emami as Acting Superintendent of the New York Department of Financial Services (NYDFS). She is the second acting superintendent since the resignation of Benjamin Lawsky, who left NYDFS in June 2015 for a private-sector position specializing in cyber security research and consulting. Ms. Emami replaces Anthony Albanese, who also left for the private sector.
Prior to her appointment, Ms. Emami served as both the Executive Deputy Superintendent and the General Counsel of the NYDFS Banking Division. …
Continue ReadingNYDFS Notifies Federal Regulators of New Potential Cyber Security Regulations
On November 9, 2015, the New York State Department of Financial Services (NYDFS) sent a memorandum entitled Potential New NYDFS Cyber Security Regulation Requirements to several federal and state financial services regulators, including banking, securities and insurance regulatory, administrative and supervisory bodies.
These potential regulations are based on results of two sets of surveys of financial entities about their “cyber security programs, costs and future plans.” NYDFS surveyed 150 banks and 43 insurance companies. The results of the May 2014 banking industry survey are here…
Continue ReadingReminder to Eligible Excess Line Insurers with Policyholders in the State of New York — Minimum Surplus Requirement Increases for Excess Line Insurers
A Twelfth Amendment to New York’s Insurance Regulation 41 was promulgated by the Department of Financial Services after the President signed the Nonadmitted and Reinsurance Reform Act (NRRA), which was Title V, Section I in the Dodd-Frank Wall Street Reform and Consumer Protection Act, 15 U.SC. 8201.
This amendment adopted most of the provisions of the NRRA on or about April 18, 2011. Like New York, most states incorporated, as amendments to their statutes or regulations, the provision in the NRRA that the primary regulator …
Continue ReadingLet the (Employee) Beware: New Shift in DOJ Policy Places Emphasis on Individual Accountability
On September 9, 2015, the Deputy Attorney General (DAG), Sally Quillian Yates, issued a memo to senior leadership at the U.S. Department of Justice (DOJ) entitled “Individual Accountability for Corporate Wrongdoing.” In this memo, the DAG highlighted a new emphasis on not just holding corporations/entities responsible for corporate wrong-doing but also holding individual employees/officers responsible for any illegal activities. This new emphasis applies in both civil and criminal matters. The memo notes:
One of the most effective ways to combat corporate misconduct is …
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