Litigation

Bair Says FDIC May Start To Provide Guarantees For Insurance Companies

By John Darer

NO, Not THAT Bair!

Sheila C. Bair, the Chairman of the Federal Deposit Insurance Corporation, addressing the International Association of Deposit Insurers (IADI) annual meeting in Washington on October 29, 2008, is said to have stated that such guarantees could be possible IF the insurance industry comes under federal regulation.

The timely theme for the IADI conference was "The Role of Deposit Insurance in Promoting Financial Stability and Economic Inclusion".

Regulation of insurance by states was endorsed by Congress in 1945 under the McCarran-Ferguson Act and  reaffirmed under the Gramm Leach Bliley Act, in 1999.

When recently discussing the subject with a friend he reminded me of colorful analogy put forth by a Southern attorney:  "When it comes to State versus Federal regulation of the insurance industry, you must decide if you would rather make love to fifty monkeys or King Kong. Now before you answer that question, consider this...........when you make love with King Kong, you don't quit when you want to quit.....you quit when King Kong is ready to quit."

Further information concerning the debate over federal regulation of insurance:

The Case For Federal Regulation of Insurance  Tom Baker University of CT School of Law May 2007

Optional Federal Charter Insurance information Institute April 2008

Full post as published by Structured Settlements 4Real on October 30, 2008 (boomark / email).