WASHINGTON BUREAU – Insurers are different from banks, and mutual life insurers are different from stock life insurers, according to Massachusetts Mutual Life Insurance Company.
The Financial Stability Oversight Council (FSOC) should keep the differences in mind when developing a systemic risk evaluation process for nonbank financial companies, Kenneth Cohen, deputy general counsel at MassMutual, Springfield, Mass., says in a comment letter.
MassMutual submitted the letter in response to an FSOC request for comments about implementation of Section 113 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, which gives the FSOC the authority to recommend extra federal oversight for insurers and other nonbank financial companies that appear to be important to U.S. financial stability.
Life insurers have characteristics that reduce the likelihood that they will become a threat to the financial stability of the United States, Cohen says.
“Life insurers should be evaluated by metrics that fit the characteristics of life insurers, as opposed to metrics designed for other financial services institutions (e.g. banks),” Cohen says.