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Senate Passes SIFI Bill Noting Differences Between Banks and Insurance

The U.S. Senate has passed a measure to modify the Dodd-Frank law to provide the U.S. Federal Reserve with greater flexibility in tailoring capital rules for insurers deemed systemically important financial institutions...
June 12, 2014

The U.S. Senate has passed a measure to modify the Dodd-Frank law to provide the U.S. Federal Reserve with greater flexibility in tailoring capital rules for insurers deemed systemically important financial institutions (SIFIs). The measure, sponsored by Sens. Sherrod Brown (D-Ohio), Mike Johanns (R-Neb.) and Susan Collins (R-Maine), remedies the notion that capital rules for banks and insurers should be the same under the 2010 Dodd-Frank law.

The insurance industry argues that imposing bank-centric standards on insurers would cripple their ability to do business. “Applying bank standards to insurers could make the financial system riskier, not safer,” said Sen. Brown. The Senate passed the measure under unanimous consent, meaning there was no opposition—a highly unusual consensus on the part of lawmakers. The insurance measure is likely to pass the U.S. House, where a similar bill has broad support.

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