and that reform should focus licensing, prudential regulation and international coordination. it has been suggested that the authority of a systemic risk regulator should encompass traditional regulatory roles and standards for capital liquidity, risk management, collection of financial report, examination of authority and an a authority to take regulatory action if necessary. we are concerned that the systemic risk regulator envisioned by some, one without cheer, delineated lines of authority and strong, preemptive powers would be redundant with the existing state-based regulatory system. we also note that without regulatory reform and a prudential federal re insurance regulator, a federal systemic regulator would be an additional layer with limited added will have and you create issues with applicable tomorrows and be in conflict with the multi-state system of regulation. foreign government officials not unlike in skinner today have continued to raise issues associated with having on different u.s. regulator which is makes coordination on international insurance issues diffi

between the state and the federal with the consumer protection here on the state regulator and the prudential regulator on the federal regulator, you would see conflicting approaches, is that correct? >> besides the inefficiency one. besides inefficiencies, when we get it right, when we design a product that meets the customers' needs and allows us to be prudent in reasonable in regard to solvency, 20 and 30 years out. we bring together our solvency people and our financial reporting people and our pricing people and we have committees in our company that we call, would you want your mother to own a committee? say it would be our equivalent, to make sure the consumer is treated fairly. all those disciplines come together in the same place. to regulate us any differently, i think would fail. if obama comes out and he does nothing, let's say with regard to insurance, that's not out on the table, but he gives it a systemic risk regulator and he also sets over here and over here he has the consumer protection division in some other area and that would be, and either one of those perm tagzs, that

there is no direct legal obligation to the consumer and it tends to focus solvency and prudential regulation. it would appear not to apply to re insurance contracts, the consumer aspect. >> thank you, mr. baird. >> when we design a product we feel we are making promises to our customers to deliver benefits 20, 30, 40 years into the future. at the point in time when we're designing that product we have to bring in solvency and capital markets people, solvency people, marketing people to make sure we're designing people to make sure somebody values to separate that and have an agency only focused on the consumer side we believe is not complete. if we didn't have the disciplines at the point in time we designed a product, that product would fail. >> what could we do? what would we do? what might we do that would limit your ability to allow americans to have a greater opportunity to insure themselves against challenges? >> believe that obviously the life insurance industry is about strong consumer safety standards. i believe if it is looked at in a vacuum and not part of a federal functional reg

and so the question jures prudential or in terms of judicial behavior is whether the court will seek to what the justice department strongly urges it to do, which is to find some way to reconcile and eliminate this tension and not have the two prongs of title 7 be at war with one another. it will be very interesting to see whether they can do that. if you look at the april arguments, this case was argued in the courts last argument sitting, in which 10 cases were argued in april and there were two cases that remain undecided. this case and a banking regulation preemption case called cuomo against clearinghouse and justice kennedy has not written yet. kennedy is extremely skeptical of government counting by race, but on the other hand he and the chief justice, as you recall, parted company two years ago in an extremely important case called parents involved, that was the seattle and louisville schools case where the chief justice wrote for a plurality in which he said that the racially conscious efforts that the louisville and seattle school boards had taken to prevent resegregation o

i think a more macro prudential or system wide approach may help. >> thank you, mr. chairman. i yield back. >> mr. garrett? >> thank you, mr. chairman. mr. chairman, you know, the other hat i wear is in financial services and when you come over there, the issue that is often discussed the term the systemic risk, the systemic risk regulator. of all the hearings we had, nobody defined what it is, what authority they'll have, what they'll regulate, so on and so forth. one thing, out of tboth of the committees i serve on, i'll take a page out of paul ryan's comments here that is that one thing is a systemic risk is the unfunded debt out there. the numbers vary on that. interesting enough, we had expert after expert last six years come before the committee. they all say the same thing. and we hear it from both sides of the aisle. in the budget we got this year, unfortunately, it really isn't addressed. we spend more of the numbers you already said before, we're looking at a national debt double in ten year, and interestingly on those numbers, maybe somebody else referenced this, wh

, because there is some tension in the way title 7 law has developed, and so the question jurs prudentially, or the question toward judicial behavior is whether the court will seek to do what the justice department strongly urges it to do, which is to find some way to reconcile and eliminate this tension and not have the two prongs of title 7 be at war with one another, and it will be very interesting to see whether they can do that. if you look at the april arguments, this case was argued in the court's last arguments, in which ten cases were argued in april and there were two cases that remain undecided. this case, and a banking regulation preemption case called cuomo against clearinghouse, and justice kennedy has not written yet from april, and so i think there is certainly a fair possibility that this will be a kennedy opinion, and that will be really interesting, because he is somebody who is extremely skeptical of government counting by race, but on the other hand, he and the chief justice, as you recall, parted company two years ago in an extremely important case involved parents inv