WASHINGTON, D.C. – Today, President Obama signed into law a new bipartisan bill authored by U.S. Sens. Susan Collins (R-ME), Sherrod Brown (D-OH), and Mike Johanns (R-NE). The law clarifies a provision in the 2010 Dodd-Frank law that streamlines regulations for insurers. The bill, which passed the Senate in June and the House in December, provides the Federal Reserve the authority to differentiate between banks and insurance companies when setting capital standards.
“This law illustrates what can be done when Congress works together,” Brown said. “This commonsense fix ensures that traditional life, property, and casualty insurance are not regulated in a way that makes sense for banks but not insurers. I applaud the President for signing this bill into law, and my colleagues Senators Collins and Johanns for their leadership.”
Specifically, the Insurance Capital Standards Clarification Act of 2014 would:
- Add language to Section 171 of Dodd-Frank to clarify that, in establishing minimum capital requirements for holding companies on a consolidated basis, the Federal Reserve is not required to include insurers to the extent they are engaged in activities regulated as insurance at the state level;
- Provide a mechanism for the Federal Reserve, acting in consultation with the appropriate state insurance authority, to provide similar treatment for foreign insurance entities within a U.S. holding company where that entity does not itself do business in the United States; and
- Limit the ability of the Federal Reserve to require insurers which file holding company financial statements using Statutory Accounting Principles to instead prepare their financial statements using Generally Accepting Accounting Principles.