WASHINGTON — The insurance industry is asking the Federal Reserve Board of Governors for more time to respond to a request for comments on regulatory capital requirements that the agency would impose on insurers designated as systemically significant and those that operate thrift holding companies.
The current deadline is Aug. 17. The trade groups are seeking an additional 45 days, or, at a minimum, 30 additional days to comment.
The letter said the time is needed to “ensure careful and thorough analysis and feedback.”
The proposal is R-1539.
The letter said that the proposal “is an important precursor” to the Fed’s ultimate rulemaking on what the two trade groups said was “a subject of immense importance to our respective member companies.”
The letter added that, “The degree of importance in ensuring that the Board receives the highest level of thoughtful, comprehensive and analytical commentary from all interested and affected parties cannot be overstated.”
The letter noted that are already a number of regulatory initiatives by federal agencies that insurers are trying to respond to.
These include proposals dealing with executive compensation and capital requires for Systemically Significant Financial Institutions (SIFIs) such as American International Group and Prudential Financial. MetLife is challenging a similar designation in court, and won the first round, a decision in U.S. District Court in Washington, which held that federal regulators were inappropriately seeking to oversee MetLife as a SIFI. The Treasury Department is appealing that decision.
The letter also notes that the International Association of Insurance Supervisors (IAIS) has just issued the second consultation on its insurance capital standard proposal, which requires a detailed response by October.
The letter said the industry is “very concerned” that the current deadline for comments on the proposals “will not accommodate the need for this level of feedback and input.”
The Dodd-Frank Act gave the agency authority for the first time to oversee certain types of non-banks, such as insures. These include those designated as SIFI, and those which operate thrift holding companies, such as USAA and State Farm.
SIFIs currently under Fed oversight are American International Group and Prudential Financial. MetLife is challenging a similar designation in court, and won the first round, a decision in U.S. District Court in Washington which held that federal regulators were inappropriately seeking to oversee MetLife as a SIFI. The Treasury Department is appealing that decision.
The proposals the industry are seeking more time to comment on were unveiled June 3, and are not specific proposals but are what are known as “advance notice of proposed rulemaking,” i.e., information on the level of capital the Fed believes is appropriate for the two types of institutions.
Actual rule proposals will be based on comments to its thinking that the Fed is seeking from insurers.
The proposal for SIFI requires higher levels of capital than currently required for insurers by state regulators, while the proposal to oversee insurers which operate thrift holding companies requirements similar to those already imposed by state regulators.