One of the hallmarks of the first several months of the administration of New York’s Governor Cuomo was the presentation and adoption of his plan to consolidate the regulation of financial services, including the merger of the banking and insurance departments to be effective on October 3, 2011. Over the coming months there will be considerable scrutiny by banking and insurance industry participants and observers to see whether or not the merger can or will meet the stated goal of the law “To establish a modern, dynamic, attentive, twenty-first century system of regulation, rule making and adjudication, that is responsive to the needs of the banking and insurance industries, as well as the state's consumers and citizens; . . ."
Understandably, this initial scrutiny will be focused on the routine day-to-day interaction between the regulators, the regulated companies and the service providers to the regulated companies. Will there be the same access to the department as you were accustomed to in the past? Will you be dealing with the same department people? Will former banking regulators be handling insurance regulatory issues and vice versa? Will things that used to take forever now take forever and a day? People dislike having their routines changed, and how the merger will change routines both for the employees of the merged agencies as well as those dealing regularly with the agencies, is of the utmost immediate concern for many. But there is another longer-term issue that needs to be addressed as well: What does the new Financial Services Law portend for the future of the business of insurance in New York?
Here is a link to my web site page where you can access a copy of my article, "A Challenge to the Cuomo Administration" (Articles Web Page) urging the administration to carry out and support the stated goals of the new merger law, and to demonstrate that these objectives are not just a salve to calm industry skepticism. The article focuses on three examples where the new department has an opportunity to prove it is prepared to support meaningful alternative market initiatives: the "free zone", captives and the insurance risk exchange. The purpose is to promote a continuing dialogue on the goals of the new law and the intent of the administration in its execution.
The article is also slated to be published in the September 28, 2011 issue of Insurance Advocate magazine.