Insurers which operate thrifts would be subject to the same capital standards as banks at the holding company level except for certain unique insurance activities under new capital standards being proposed by federal regulators.
The new requirements are contained in a proposal first issued by federal banking regulators for comment in June.
The comment period was extended from Sept. 7 to Oct. 22 in a notice published Wednesday.
Under the proposal, special capital treatment for insurers would be only applied to specific activities, such as separate accounts, deferred acquisition costs and insurance underwriting.
Sue Stead, head of the insurance regulatory practice at Nelson Levine de Luca & Hamilton in New York, said state insurance regulators are aware of the Fed proposals.
She said they are concerned “about the potential impact of federal regulation on how insurers are currently regulated.”
Stead said they are having discussions with federal regulators to ensure that the new rules are “compatible with how insurance companies are currently regulated.”
They also are working to make sure federal regulators, in proposing new rules, fully take into account that insurers “are already highly regulated,” with strict standards, for example, on capital, on how they invest, and what they invest in,” Stead said.
The proposal was published for comment by the Board of Governors of the Federal Reserve System; the Office of the Comptroller of the Currency; and the Federal Deposit Insurance Corporation.
The plans by federal regulators were first disclosed by The National Underwriter in a May 2 article which said that Federal Reserve bank officials have identified 20 holding companies and constituent thrifts it intends to oversee.
The Fed is doing so under Sec. 171 of the Dodd-Frank financial services reform law, which moves oversight of thrift holding companies from the Office of Thrift Supervision, which was dissolved under DFA. Its responsibilities have been shifted to the Fed and the Office of the Comptroller of the Currency, which now has the authority to charter savings and loans.
These include American International Group, State Farm, Nationwide, Prudential, Northwestern Mutual, Massachusetts Mutual and W.R. Berkley.