FDIC ENGAGED IN DODD-FRANK RULEMAKING THAT MAY AFFECT INSURERS AND REINSURERS
The FDIC has published a Notice of Proposed Rulemaking proposing rules for the implementation of the Dodd-Frank Act provisions providing that the FDIC may, as a receiver, “resolve” (i.e., liquidate) covered financial companies. The proposed rules address very limited topics, encompass six sections, are only one and one-half pages of the Federal Register in length, and obviously are not the only rules that the FDIC will propose to implement its resolution authority under DFA. Dodd-Frank provides that while the liquidation of any insurance company could be initiated by the Secretary of the Treasury, “if an insurance company is a covered financial company or a subsidiary or affiliate of a covered financial company, the liquidation or rehabilitation of such insurance company, and any subsidiary or affiliate of such company that is not excepted under paragraph (2), shall be conducted as provided under such State law.” Dodd-Frank Act, section 203(e)(1). The proposed rules do not contain any provisions recognizing or implementing this subsection, but do contain a provision providing for a lien on the assets of an insurance company if the FDIC “makes funds available to” the insurance company. The comment period for the proposed rules expires November 18, 2010.
This post written by Rollie Goss.
