New York Gov. Eliot Spitzer has created a commission to identify ways for New York to enhance its status as a world financial capital by modernizing its regulatory scheme and perhaps merging state regulation of insurance, banking and securities.
“The financial world has changed and we must change with it to retain our leadership position,” Spitzer said. “This panel will help the state bring its regulatory structure into the 21st Century, encouraging the use of cutting edge technology and techniques to provide capital, insurance and other services to companies and individuals around the country and the globe.”
Spitzer asked the New York State Commission to Modernize the Regulation of Financial Services, which includes representatives from industry, consumer groups and government, to review all financial services statutes, regulations and policies and propose changes by June 30, 2008.
State Insurance Superintendent Eric Dinallo will chair the new commission. “Current laws and regulations in New York do not work for the industry or the consumer. Financial services companies claim that they face unnecessary regulatory hurdles in bringing new products to market. Consumer advocates claim that public awareness about the risks and costs of what are fundamentally the same financial products can vary depending upon the state agency that is doing the regulating,” Dinallo said. “We must develop new laws and regulations that promote competition and the growth of business, while effectively protecting both consumers and honest businesses from unfair or unethical practices.”
Four separate New York state agencies — the Insurance Department, the Banking Department, the Department of State and the Attorney General’s Office — all regulate the financial services industry. This regime was created at a time when federal laws restricted the commercial activities of financial services firms and the activities of banks, insurance companies and securities firms were more distinguishable.
Critics believe the current structure results in burdensome and inconsistent state regulation.
Among its charges, the commission is to identify ways regulatory powers might be integrated and changed.
Spitzer named CEOs from AXA Equitable, American International Group and MetLife to the panel along with representatives from banking, securities, legal, consumer, and regulatory and business communities.
Topics New York Legislation
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