As expected, legislation was introduced in both the House and Senate Tuesday aimed at clarifying that federal regulators must use state-based metrics in overseeing insurance companies.
The Senate version is expected to be added to legislation reauthorizing the Terrorism Risk Insurance Act that industry officials anticipate will be taken up by mid-May in the Senate Banking Committee.
The American Council of Life Insurers voiced strong support, as did all three primary property and casualty insurance trade groups voiced strong support for the legislation and urged its prompt passage. These include the National Association of Mutual Insurance Companies; the Property Casualty Insurers Association of America (PCI); the National Association of Mutual Insurance Companies (NAMIC) and the American Insurance Association (AIA).
S. 2270 was introduced by Sens. Susan Collins, R-Maine; Sherrod Brown, D-Ohio; Mike Johanns, R-Neb. The House bill, H.R. 4510, is sponsored by Reps. Gary Miller, R-Calif. and Carolyn McCarthy, D-N.Y. It is titled “the Insurance Capital Standards Clarification Act of 2014.”
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“The bills introduced on April 29 update legislation previously introduced by the lawmakers on the topic. ACLI thanks Collins, Brown, Johanns, Miller and McCarthy for their continued leadership to ensure the appropriate application of capital standards for insurers,” the trade group said in a statement.
“ACLI strongly opposes the application of bank-centric capital standards to life insurance companies,” the statement said.
The bill clarifies Sec. 171 of the Dodd-Frank Act (DFA), which was sponsored by Collins. A statement by Miller and McCarthy says that their legislation “revises” Sec. 171, which “requires” the Federal Reserve to apply bank capital rules to insurance companies it supervises.
S. 2270 and H.R. 4510 “clarifies” that the Fed can apply insurance-based capital standards to the insurance portion of the business, while still keeping banking capital standards for the banking portion of the business.