You are here:HomeNews CenterInsurance News2013Bill Introduced to Exempt Insurers from Bank Capital Requirements

Bill Introduced to Exempt Insurers from Bank Capital Requirements

A group of U.S. senators is seeking to make sure insurance firms won’t have to meet capital requirements intended for banks with new legislation targeting a measure Federal Reserve officials have said puts them in a bind...
July 31, 2013

A group of U.S. senators is seeking to make sure insurance firms won’t have to meet capital requirements intended for banks with new legislation targeting a measure Federal Reserve officials have said puts them in a bind. The group, which includes Sen. Sherrod Brown (D-Ohio), is introducing legislation to remove insurance companies from under a section of the 2010 Dodd-Frank financial overhaul law commonly known as the Collins Amendment. That provision requires the Fed to apply minimum capital and leverage requirements to the financial holding companies it oversees.

The legislation being introduced by the senators would exempt insurers from the Collins Amendment. Insurance holding companies would have to adhere to the state-based capital requirements they’ve long been subject to, while their bank affiliates would have to meet requirements set by federal regulators. Insurers deemed by federal regulators to pose a systemic risk to the broader financial system would have to meet additional capital requirements set by the Fed. “Sen. Brown believes that the Fed already has the flexibility to make these changes, which recognize that insurance companies have different business models from banks, under the current law. He encourages the Fed to do so,” a spokesman for Sen. Brown said.

Filed under: