The U.S. Senate Monday night unanimously passed legislation introduced by U.S. Sens. Mike Johanns (R-Neb.), Susan Collins (R-Maine) and Sherrod Brown (D-Ohio) to clarify that a provision in the 2010 Dodd-Frank law provides the Federal Reserve with the authority to take into account the significant distinctions between banking and insurance when setting capital standards. This bipartisan bill removes any doubt that the Federal Reserve need not impose a bank-centric capital regime on insurance activities.

Johanns said, "It never made sense to treat insurance companies like big banks and this clarification makes sure that doesn't happen. Our commonsense regulatory fix - the first revision of Dodd-Frank - will give peace of mind to local insurers worried about one-size-fits-all capital standard regulations in the law. The House should act quickly so American consumers will not face a rate hike caused by this overly broad Dodd-Frank provision."

Collins said, "Section 171 of the Dodd-Frank law allows federal regulators to take into account the significant distinction between banking and insurance. The Federal Reserve has acknowledged this important distinction, but has repeatedly suggested that it lacks the legal authority to differentiate between the two types of business models. Our legislation clarifies that authority."

Brown said, "There is broad bipartisan agreement that providing traditional life, property, and casualty insurance is different from banking. I want strong capital standards, but they have to make sense. Applying bank standards to insurers could make the financial system riskier, not safer. That is why the Federal Reserve must recognize the differences between the industries and ensure that institutions engaging in insurance are not held to the same capital requirements as traditional banks."

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