The Connecticut Insurance Department has entered into a new agreement with the German Federal Financial Supervisory Authority in order to better supervise an insurance organization that does business in both Germany and the U.S. The agreement is the second between the two entities in the past three months. Insurance Commissioner Thomas Leonardi believes that ensuring the financial stability of insurance companies is vastly important to the protection of consumers. Regulation, according to Leonardi, is the best way to keep insurers from making costly decisions that could compromise the economy.
As per the agreement, both regulatory authorities will be able to cooperate in managing the insurer and making sure that the company adheres to regulations in both countries. The Connecticut Insurance Department has not yet identified which insurance company is involved, but that information may be released next year.
Insurers played a role in the 2008 global recession. In the wake of the financial calamity, insurers saw more regulations imposed on the industry as financial authorities attempted to fortify countries from future economic turmoil. The Connecticut Insurance Department hopes that the new partnership with its German counterpart will help the insurance industry adhere to international and local regulations and discouraged companies from adopting risky business practices. Insurance Commissioner Leonardi believes that the partnership will prove beneficial to consumers in both Germany and the U.S.