STATE OF CONNECTICUT
Thomas B. Leonardi
Commissioner Leonardi: CT Lead In Group Supervision
A ‘Best Practice’ for Consumers, Industry and State
Insurance Commissioner Thomas B. Leonardi today announced that the Department is quickly taking advantage of a new state law that gives the Commissioner authority in establishing “Supervisory Colleges,” routine regulatory forums among state and international insurance regulators to assess the financial health and risks of several Connecticut-based insurance groups with international operations.
"On the heels of the financial crisis, the convening of colleges are becoming the gold standard and best practice for the regulation of large insurance groups with international operations. I do not have specific concerns about the solvency or financial position of the companies participating in the supervisory colleges. I very much appreciate the willing cooperation that our Connecticut-based companies have demonstrated over the last several months,” the Commissioner said. “The financial stability of our carriers is paramount for consumer protection and critical to our state economy.”
“Governor Malloy and our state Legislature recognized the importance of group supervision in the recent bipartisan passage of the Revisions to the NAIC's Model Insurance Holding Company System Regulatory Act that empower the Commissioner to lead and participate in Supervisory Colleges for large insurers with international operations,” Commissioner Leonardi said. ”
The state holding company law (Public Act 103), enacted in June, allows the Insurance Commissioner to establish supervisory colleges for insurers that are part of a holding company with international operations. It should be noted that the results and analysis of these Supervisory Colleges are confidential.
The Commissioner initiated the convening of five colleges over the past several weeks, including those for Aetna, Cigna, The Hartford, Travelers and UnitedHealth Group. Commissioner Leonardi also participates in Supervisory Colleges led by the Swiss Financial Market Supervisory Authority in Switzerland, the Dutch National Bank in The Netherlands and the State of Nebraska Insurance Department. These colleges are new and are designed to be routine regulatory tools used to coordinate international regulatory supervision and are not convened in response to specific regulatory concerns. Information exchanged in a supervisory college context between regulators is confidential subject to the applicable confidentiality agreement.
The Supervisory Colleges allow international and State-based regulators to confidentially assess and better understand the Group's activities wherever those activities are carried out. In this manner, regulators can peer through the window of the insurance holding company with international operations to gauge the impact of a wide variety of those financial activities on domestic insurance operations.
Home to one of the largest insurance-producing markets in the nation, Connecticut is a leading voice for group supervision of globally active insurance companies and an active member of the International Association of Insurance Commissioners (IAIS). Among the highlights:
Connecticut is the only U.S. signatory to date on an IAIS formal regulatory agreement with 30 foreign jurisdictions, representing 45 percent of worldwide premium volume.
Connecticut hosted an IAIS committee meeting in June that brought more than two dozen international regulators to the “Insurance Capital” for official regulatory work.
Commissioner Leonardi is the sole U.S. regulator-member of the IAIS’ Financial Stability Committee, which is developing criteria to identify Globally Systemically Important Insurers (G-SIFIs).
Connecticut has three separate confidentiality agreements with financial regulators in Switzerland, Germany and the Netherlands.