Effective Oct. 3, 2011, the state of New York, home to many of the largest and most sophisticated financial services companies in the world, significantly changed its regulatory landscape by merging its primary financial services regulators, namely, the Insurance and Banking Departments, into a new, single agency, known as the Department of Financial Services (DFS). The DFS is the brainchild of Gov. Andrew Cuomo, and was created by the Financial Services Law (FSL) enacted earlier this year as part of his 2010-2011 New York state budget.
The merger and creation of the DFS mark the beginning of a new regulatory era in New York, and signify a move towards more unified and comprehensive oversight of financial services generally and both the insurance and banking industries in particular. The merger has dual origins, stemming both from government’s perceived frustration at the inability to regulate certain hybrid financial products and practices as well as Gov. Cuomo’s goal of government consolidation and efficiency. Both goals will affect the law’s implementation.
