WASHINGTON BUREAU — Sen. Christopher Dodd has unveiled a financial services bill that would give federal banking regulators the authority to oversee insurance companies, especially if the insurance companies pose a potential threat to the financial system.
The bill, similar to one Dodd, D-Conn., proposed in December 2009, also would create a federal Office of Insurance Information, and it includes surplus lines and reinsurance provisions.
The old Dodd draft included a financial intermediary “standard of care” provision, Section 913, that triggered a battle that put financial planners on one side and broker-dealers, including life insurance agents affiliated with broker-dealers, on the other side, by proposing that the U.S. Securities and Exchange Commission impose a “fiduciary standard” on all intermediaries who provide personalized investment advice.
The redrafted version of Section 913 simply requires the U.S. Securities and Exchange and Exchange Commission to study the issue.
The new bill would require insurers with assets of more than $50 billion to help pay into a fund that would be used to resolve troubled financial companies that the regulators believe pose a risk to the financial system.