Home News Local news Provision to Revise Banking and Insurance Division Receives Broad Support

Provision to Revise Banking and Insurance Division Receives Broad Support


Nov. 30, 2006 — A provision to remove the Division of Banking and Insurance from under the auspices of the Office of the Lieutenant Governor was favorably received by many testifiers before the Senate this week.
Now included in the Government Reform and Modernization Act, the provision was first introduced in September as an independent bill proposed by Senate President Lorraine L. Berry. While the bill cleared the Committee on Government Operations and Consumer Protection, it has since been pending in the Committee on Rules and Judiciary.
The proposal has been revised since September, taking into consideration recommendations made by Banking Insurance Director Deverita Sturdivant and FirstBank VI Regional Manager Cassan Pancham.
As previously written, the bill proposed that Banking and Insurance be eliminated and replaced with an independent Financial Services Bureau, which would be regulated by a seven-member board responsible for selecting a director to oversee the operations of the agency.
The revised proposal stipulates that the head of the bureau be appointed by the governor and confirmed by the Legislature.
The financial services board is not eliminated from the proposal, however. But it has been expanded to include professionals trained in the fields of banking, insurance, securities and money services. "It will take on the powers of the territory's Banking Board, which will be repealed by this act," Berry said when contacted Thursday.
The revised bill garnered much support from testifiers during Wednesday's Committee of the Whole hearing. However, Banco Popular Senior Vice President Valentino I. McBean, accompanied by attorney David Bornn, put forth a few recommendations to streamline the legislation, including:
–specifying in what areas the director should be qualified;
–giving the director and the bureau the power to actively market the territory's financial services industry;
–giving the director the ability to issue subpoenas, and authorizing the Bureau to hire its own legal counsel;
–removing a provision that automatically transfers funds and personnel from the Division of Banking and Insurance to the Financial Services Bureau; and
–creating separate divisions within the Financial Services Bureau for banking, insurance and securities, among others, and allowing for the appointment of assistant directors for each division.
According to provisions included in this year's Omnibus Authorization Act, the director of the Financial Services Bureau will also have the added responsibility of serving on the PFA board, replacing the governor as a member of the authority's board of directors.
Several other PFA reforms are outlined in the Omnibus bill, which Berry says addresses concerns frequently raised by senators regarding what the PFA "can and cannot do."
"We want to bring amendments to the current statute which establishes the PFA," Berry explained during a recent interview. "That's because several senators are concerned with some of the powers the organization has, such as the lack of a competitive bidding process and the authority they have to utilize funds without the authorization of the Legislature."
Changes included in the Omnibus bill include:
–laying out qualifications for board members;
–requiring the PFA go through the competitive bidding process on contracts worth more than $5,000;
–allowing board members to elect the chairman of the PFA board (a position currently filled by the governor); and
–giving the Legislature more regulatory control over how the authority spends funds, such as bond proceeds, interest earned on bond proceeds, debt reserves and dividends.
Berry said senators would be taking time to hear testimony on all sections of the Omnibus and Government Reform Acts–and will decide what to delete– before the two bills come up for a vote during a full session scheduled for Dec. 11.
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