AXA S.A is telling federal regulators that “life insurance companies are highly unlikely to pose a system risk to the U.S. financial system.”
AXA, the French parent of AXA Equitable Life Insurance Company, sent its remarks in a comment letter to the Financial Stability Oversight Council (FSOC). In an advance notice of proposed rulemaking, the Council is asking what criteria should be used in subjecting non-bank financial companies to heightened supervision by the Federal Reserve Board under Sec. 113 of the new Dodd-Frank law.
The provision authorizes the FSOC to determine if a U.S. or foreign nonbank financial company should be subject to Fed supervision under “heightened prudential standards.”
The provision calls for increased supervision if the FSOC finds “material financial distress” at the company “or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities” of a company “could pose a threat to the financial stability of the United States.”
The AXA letter states that no “single criterion should determine systemic risk, and systemic risk criteria generally do not fit life insurance companies.”