As debate over financial services regulation continues in Washington, the American Academy of Actuaries has voiced its support for a federal systemic risk regulator for the entire financial services sector.
According to a recent whitepaper by the association's Financial Regulatory Task Force, state insurance regulators would likely maintain a significant role in supporting the proposed federal regulator.
"Considering the diversity and complexity of modern corporations, a federal systemic risk regulator would be best-positioned to coordinate at a national level and across international lines to monitor and manage systemic risk. But the American Academy of Actuaries envisions a federal regulator that would work in conjunction with the current state-based insurance regulatory system and not detract from the state insurance regulators' public responsibilities."
The whitepaper also emphasized that the new systemic risk regulator must work closely with corporate management of systemically significant companies to ensure that risk-management practices are used.