The new Financial Stability Oversight Council (FSOC) has put out a request for information that includes a question about how the FSOC should apply the “Volcker Rule” to insurers.

Dodd-Frank compass

The FSOC is an entity created by the new Dodd-Frank Wall Street Reform and Consumer Protection Act that is supposed to keep tabs on systemic risk at insurers as well as other financial services company.

The statutory chairman of the council is the Treasury secretary, and the council held its first meeting Friday.

The FSOC will be responsible for implementing the Volcker Rule provisions given in Section 619 of the Dodd-Frank Act. The provisions are supposed to keep banking entitities that benefit from federal insurance, or explicit or implicit government guarantees, from profiting from financial speculation.

The FSOC is supposed to implement Section 619 in a fashion that will “appropriately accommodate the business of insurance within an insurance company, subject to regulation in accordance with the relevant insurance company investment laws, while protecting the safety and soundness of any banking entity with which such insurance company is affiliated and of the United States financial system,” according to the section text.

The FSOC is asking commenters to submit views on how to ensure that implementation of the

Volcker Rule accommodates the business of insurance.

The council also asks commenters to discuss the factors and considerations that should shape the definitions of terms such as “banking entity,” “hedge funding, “trading account,” “illiquid fund,” “risk-mitigating hedging activities” and “permitted activity by an insurance company.”

In addition, the council is seeking comments on any additional capital and quantitative limits might be needed to protect the safety of nonbank financial entities that are supervised by the Federal Reserve Board; the kinds of activities that are especially risky; strategies for preventing evasion of the Volcker Rule; international considerations; and timing issues associated with divestitures of illiquid assets.

The call for comments is set to appear in the Federal Register Wednesday.