Members of the Senate Agriculture Committee have approved the Wall Street Transparency and Accountability Act, a bill that would impose a new layer of regulation on insurers that use derivatives.

Members of the committee voted 13-8 to pass the bill, which does not yet have a bill number. Sen. Charles Grassley, R-Iowa, joined 12 Democrats in supporting the measure.

The bill, sponsored by Sen. Blanche Lincoln, D-Ark., chairman of the Agriculture Committee, provides exemptions for use of custom derivatives not traded on transparent exchanges, but only for commercial users. The exemptions would help airlines, farmers, and others that use derivatives to lock in the cost of the fuel or other raw materials used in the products they make or sell.

The exemption would not apply to insurers that use derivatives to hedge life insurance policies or other insurance policies against interest rate risk. If the Lincoln bill took effect in its current form, insurers would have to hedge risk by using standardized derivatives contracts listed on exchanges, an insurance industry lobbyist says.

The House financial services reform bill provides an exemption for insurers that use custom derivatives.

Sen. Christopher Dodd, D-Conn., chairman of the Senate Banking Committee, and Sen. Richard Shelby, R-Ala., the highest-ranking Republican on the Banking Committee, are continuing to work on a Senate financial services bill.

Although Grassley voted for the Lincoln bill, he warned that he still may oppose the overall bill on the Senate floor.

The bill has strong support from the Obama administration. Treasury Secretary Timothy Geithner issued a statement calling committee approval of the Lincoln bill “another step towards comprehensive financial reform.”