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Current Issues Seminar: Changing the Regulatory Landscape

Text of First Deputy Superintendent Serio's Remarks

New York
January 12, 2000

Welcome to what I think is a first for the Department and a welcome progression in our continuum for training with the Department. For those of you who are our guests today Mr. Greenberg, those from our fellow regulatory agencies, what you don’t know is that this is a work in progress of getting the Department staff through Bureau conferences for some of you who may have been through fourth quarter meetings where we have companies come in and tell us what is going on out in the marketplace. This is now our chance to bring all of us together to talk about it as one and to see what are the major developments and the major implications of the recent developments on the business of regulating insurance. And, so I welcome you on behalf of the Superintendent and myself and everyone at the Insurance Department I welcome you to this conference. And, I think Steve was not overstating it when he said "this is an important event for all of us to continue this dialogue" or to start, in some cases particularly with respect to S.900, to start the dialogue for all of us as to what its implications will be for us in the business of regulating financial services.

People ask us "what are the priorities for the Department in the year 2000?" A lot of chatter in Albany, in the Capitol, people out in the marketplace, and this is it: S.900 is job one for the Insurance Department of New York, for the insurance regulatory institutions of the United States and frankly for all financial services regulators in the country. S.900 is ground zero for all of us and I think it is critical that we all understand and take it upon ourselves to emerce ourselves in the details of S.900 so that we understand the debate as it goes forward. Nobody is excluded from this. You may say well "I have a part of the insurance regulatory process over here" or "I do product development but not really what people were talking about when they were talking about S.900." And, to all of you I say we all have a role in this because we all have a very important stake in this.

S.900 and our response to it will define insurance regulation in this century, it will define the Insurance Department’s role in the business of regulating financial services institutions and it will very well indicate where our financial services marketplace goes in terms of its competition here in the United States and certainly worldwide. So, I don’t think that we are focusing on something that well, here today and probably won’t be here tomorrow. S.900 is the defining moment and in a lot of ways it’s been something that people have been waiting for many, many years. So it is a bit of a pressure cooker that has now had the top taken off of it. You may see a lot of initial activity, but the critical element with respect to S.900 is that we have the staying power to take on the challenges over the long term so that we do not say well insurance regulators went out of the box fast, they held conferences such as this, they talked to their regulated marketplace, they talked to their fellow regulators, and everything was great for about six months, a year, maybe even two years. S.900 and all that it implicates, all that it indicates, is a long-term project for all of us. And, I don’t think that we can take the short-term view on it, it is critical that we get an understanding of what it does for today but it is certainly a long-term issue.

Likewise, e-commerce, which we will discuss during the afternoon session, is a critical element because all you have to do is read the papers from this week. AOL-Time Warner, now the greatest, and the largest and certainly the most millionaires in one place, the reality is that that will become another one of those defining moments. And, so e-commerce is going to be impacted as well as impact what they do and then of course what the insurance industry does with respect to that.

So these training programs will continue both internally as well as with our fellow regulators to discuss these kinds of issues particularly in the cutting edge arena of e-commerce and S.900.