WASHINGTON BUREAU – Leaders of a key House subcommittee want the Financial Stability Oversight Council (FSOC) to revise its proposed guidelines for determining when an insurance company may pose a risk to the U.S. financial system.

Rep. Randy Neugebauer, R-Texas, chairman of the House Financial Services Committee oversight subcommittee, and Rep. Michael Capuano, D-Mass., the highest-ranking Democrat on the committee, have sent a letter calling for the chanes to the FSOC.

The FSOC is an agency created by the Dodd-Frank Wall Street Reform and Consumer Protection Act that is supposed to help other federal agencies determine whether financial services companies and other companies are big enough, interconnected enough and otherwise important enough to merit extra regulatory scrutiny. The FSOC recently issued a draft of systemic risk guidelines in the form of a proposed rule.

The FSOC should give a more detailed version of the criteria it would apply to insurers before it issues a final rule, Neugebauer and Capuano say in their letter.

“Absent such a clarification, there is reason for concern that the final rule for determining which firms should be subject to enhanced supervision will not be the logical outgrowth of the proposed rule,” the lawmakers say.

The proposed rule “provided little meaningful guidance to firms that might ultimately receive this designation,” the lawmakers say.

Putting out a final version of the rule at this point would deprive the public of a meaningful opportunity to comment, the lawmakers say.

The lawmakers sent the letter as a follow-up to an oversight hearing held April 14.

The Senate Banking, Housing and Urban Affairs Committee is set to hold a hearing on the issue May 12. One of the witnesses scheduled to testify at the hearing is Treasury Undersecretary Neal Wolin.

Jeffrey Goldstein, Treasury undersecretary for domestic finance, is also expected to attend.

Treasury Secretary Timothy Geithneer has designated Goldstein to manage FSOC operations, Neugebauer and Capuano say in their letter.

Other FSOC coverage from National Underwriter Life & Health: