WASHINGTON - The Office of Thrift Supervision and the National Association of Insurance Commissioners announced Wednesday that they had settled on a model for sharing information about the companies they regulate.
The Kentucky and Iowa insurance commissioners have signed agreements based on the model, and OTS said it expects to negotiate similar agreements with the other 48 states.
The agreements are meant to facilitate functional regulation, one of the cornerstones of the Gramm-Leach-Bliley Act. Congress wanted oversight of individual business lines operated by diversified financial holding companies by the regulators best qualified to understand them. For example, securities activities would be supervised by the Securities and Exchange Commission.
Though the OTS will not directly regulate insurance companies that choose to affiliate with thrifts, the agreements will allow the agency to obtain nonpublic information on their thrift operations and financial solvency, as well as on any consumer complaints. And insurance regulators will be able to get information about thrift operations.
"These agreements are a very important advance in functional regulation. They enhance our ability to supervise the safety and soundness of thrifts owned by or affiliated with insurance companies and their compliance with consumer protection statutes and regulations," said OTS Director Ellen Seidman.
George Nichols 3d, Kentucky's insurance commissioner and president of the national association, called information-sharing agreements the next logical step in the ongoing efforts of state insurance regulators to implement functional regulation.
The model agreement states that the information regulators share must remain confidential, and it places limits on who may have access to it.
The Office of the Comptroller of the Currency reached a less detailed agreement with the commissioners' association in June, allowing the agency to obtain information on consumer complaints from state insurance regulators. The OCC has struck deals with 28 states.