The rule's namesake (Wong Maye-E AP)

Almost a quarter of the U.S. Senate, mostly Democrats, are urging regulators to act promptly to publish a final version of the so-called Volcker rule, which restricts banks from trading for their accounts also known as proprietary trading.

The letter is expected to raise concerns from the life insurance industry.

The industry said in a comment letter that the latest version of the proposed rule has unintended consequences because it has the potential to raise premiums for customers and reduced their ability to provide options and innovative features in their products by impeding an insurance company’s ability to manage its fixed income portfolio and to enter into and manage hedging transactions.

Sens. Carl Levin,Mich., and Jeff Merkley, Oregon, got 19 fellow Democrats and one independent to sign on to the letter. They were the original sponsors of the amendment ultimately incorporated into the Dodd-Frank Act before it was passed in 2010.

“The economy needs these protections, our constituents deserve these protections, and the law demands these protections,” the letter said.

The letter was written in response to a recent announcement by the four federal regulatory agencies crafting the rule clarifying that the Dodd-Frank Act grants banks two years to fully comply with the Volcker Rule. In the letter, the regulators said proprietary trading need not be affected by the rule until July 2014.

The letter was sent to the heads of the Federal Reserve, the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, the Commodity Futures Trading Commission and the Office of the Currency.

Highlighting a concern that final action on the rule will be delayed or perhaps totally rewritten, the letter urged the regulators to act promptly.

“To be sure, the proposed rule is not perfect, but it should not be delayed or scrapped,” the letter said. “Please implement a clear, strong, and effective Volcker Rule without delay.”

The letter said that “Conflict-ridden, high-risk trading activities played a central role in big banks’ accumulation of the failed toxic assets that helped freeze credit to businesses and families and led to trillions of dollars of taxpayer-backed bailouts of the largest financial firms.”

The insurance industry was granted a limited exemption to the rule through its lobbying efforts and the work of both former Sen. Chris Dodd, D-Conn., and Rep. Barney Frank, D-Mass., for whom the bill is named.

But, the industry remains concerned that the way the last proposed rule was written, there will be unintended consequences for them.

In a comment letter to the agencies on Feb. 13, the American Council of Life Insurers said that, “We are quite concerned, however, that the proposed regulations implement the Volcker Rule’s market making exception in a very restrictive way and would severely undermine market liquidity in the fixed income markets.”

The letter added that, “We believe these unintended consequences in the proposed regulations deserve careful consideration and merit a reasonable solution.”