Insurance Perspectives on Federal Financial Regulatory Reform: Addressing Misunderstandings and Providing a View from A Different Paradigm

41 Pages Posted: 27 Aug 2010

See all articles by Jeffrey E. Thomas

Jeffrey E. Thomas

University of Missouri at Kansas City - School of Law

Date Written: August 26, 2010

Abstract

Much of the current call for Federal regulatory reform of insurance is based on fundamental misunderstandings regarding American International Group (AIG) and the financial crisis, and because insurance, which is regulated predominately at the state level, provides a different, and potentially useful, regulatory paradigm. The first section of this article will analyze the role of insurance in the financial crisis. It exposes the misunderstandings and explain how insurance had little, if any, role in the crisis. The second section outlines the current, state-based regulatory paradigm for insurance, and will explain how this paradigm has become a barrier for Federal reform in the insurance area. The final section addresses the powerful role played by the courts in insurance regulation, and will suggest that financial regulatory reform could benefit from use of a similar model for other financial services.

Keywords: Financial Crisis, Insurance, AIG, Financial Regulation, Financial Reform, Insurance, Insurance Reform, Insurance Regulation

JEL Classification: G22, G28, K23

Suggested Citation

Thomas, Jeffrey E., Insurance Perspectives on Federal Financial Regulatory Reform: Addressing Misunderstandings and Providing a View from A Different Paradigm (August 26, 2010). Available at SSRN: https://ssrn.com/abstract=1666233 or http://dx.doi.org/10.2139/ssrn.1666233

Jeffrey E. Thomas (Contact Author)

University of Missouri at Kansas City - School of Law ( email )

5100 Rockhill Road
Kansas City, MO 64110-2499
United States

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