Democrats and Republicans in the Senate have found an area of agreement: They want the panel that decides which insurers are "too big to fail" to always have a member who knows something about insurance.
Sen. Mike Crapo, R-Idaho, the chairman of the U.S. Senate Banking, Housing and Urban Affairs Committee has teamed up with Sen. Sherrod Brown, D-Ohio, to introduce a modest but genuinely bipartisan bill.
Traditionally, state regulators have regulated insurance. Federal financial services regulators in Washington have focused on banks, thrifts, credit unions and securities brokers and paid little attention to insurers.
Drafters of the Dodd-Frank Act created FSOC to help federal financial services regulators monitor and understand any risk in any sector that could hurt the stability of the U.S. financial system or the U.S. economy.
FSOC also helps regulators decide which nonbank companies, including insurers, may need extra attention because they are "too big to fail" without hurting the financial system.
FSOC is supposed to include a state insurance commissioner, as a non-voting member, and an "independent member with insurance expertise."
The independent member with insurance expertise, who must be appointed by the president, is supposed to be a voting member of the council.
Because of the language in the FSOC rules, the seat of the independent member with insurance expertise may stay vacant for a long time if the member's term expires and the president fails to nominate a new member with insurance expertise.
S. 1463 would let the independent member with insurance expertise continue to serve for 18 months, or until a new independent member is confirmed, whichever comes first, supporters say.
Crapo and Brown have lined up a group of five Republican cosponsors and six Democratic cosponsors. The list of cosponsors includes both David Perdue, a Republican from Georgia, and Elizabeth Warren, a Democrat from Massachusetts.
--- Read Sen. Warren Asks Fed to Oust Wells Fargo Board Memberson ThinkAdvisor.