As negotiations over a final financial reform overhall draw closer to a conclusion, leadership at the National Conference of Insurance Legislators (“NCOIL”) petitioned Senate leadership for membership in the Financial Stability Oversight Council (“FSOC”).  As currently drafted in the Senate’s reform bill, S. 3217, the FSOC is designed to coordinate efforts to identify systemic risks to the financial stability of the United States.

Membership on the final oversight council is still undecided.  Both the House and Senate financial reform bills, which need to be reconciled before they are signed into law by the President, provide for different membership constituencies.  While there is overlap between the two regarding the seats mandated for federal regulators, the seats on the FSOC for those representing the interests of the states has yet to be decided.

NCOIL believes that not only should state officials gain membership to the FSOC, but that such members should include state lawmakers, as it is the “legislators’ responsibility to write insurance, banking, and securities statutes.”  In the words of NCOIL President Rep. Robert Damron (KY), “any plan designed to monitor and control systemic risk should include a central role for state officials and should call for enhanced communication and collaboration among all regulators, both state and federal.”