WASHINGTON — Robert Gordon, senior vice president of policy, research, and international at the American Property Casualty Insurance Association (APCIA) issued the following statement in response to the Financial Stability Oversight Council’s (FSOC) decision yesterday to finalize its activities-based designation process for nonbank systemically important financial institutions (SIFI) under the Dodd-Frank Act.
“APCIA applauds FSOC’s decision to adopt a risk-related, activities-based SIFI designation process. This is an important shift away from FSOC’s prior designation process, which focused on the size of a company as the primary determinant,” said Gordon.
“We have long encouraged regulators to focus resources on activities that truly pose systemic risk, rather than punishing financial companies simply for being large. By focusing on systemically risky activities, policymakers and regulators have more flexibility to quickly respond to changing market conditions and address excessive risk wherever it manifests. In addition, the guidance appropriately recognizes that consideration of insurance supervisors’ expertise and regulatory tools are indispensable to any designation determination.”