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Executive Branch proposes legislation to separate the Banking and Insurance Board

Palikir, Pohnpei (FSM Information Services): February 15, 2010 - President Mori has transmitted a piece of legislation to the 16^th Congress during its third regular session in order to separate the functions of the Banking and Insurance Board. The bill is an amendment to Title 37 of the FSM Code, and if passed, will create a clear delineation between the functions of the FSM Insurance Board and the FSM Banking Board, as well as their respective commissioners.

Currently, the FSM Banking and Insurance Board is one entity with one Commissioner overseeing both types of economic activities. The President has the view that the legal duties delegated to the Banking Board are different from those delegated to the Insurance Board and that the two different industries are the subject of separate regulations and therefore two different regulatory boards are needed to avoid conflicting policies.

This situation is true for the Commissioner as well. Section 203 of Title 37 is explicit in that the Insurance Commissioner shall not hold or occupy any other office unless approved in writing by the President. The intent of this is to enable the Insurance Commissioner to concentrate on insurance matters assigned to him by the Insurance Board. Because the Banking Commissioner may also serve as the Insurance Commissioner under the current Title 37, this contradicts the intent of the provision. Moreover, the President believes that the situation could create potential conflicts because the insurance commissioner must serve and fulfill separate obligations of regulating two distinct economic activities.

The President, in his transmittal letter to the Speaker, encourages all Members of Congress to seriously look into the matter and to help find ways to improve the banking and insurance regulatory framework, and seeks the support of Congress in considering the proposed bill.