At least three major insurance company groups strongly agree on one insurance capital standards point: They need more time to respond to a Federal Reserve Board capital standards proposal.
The Fed capital standards proposal would apply to “depository institution holding companies significantly engaged in insurance activities.”
The current comment deadline Dec. 23.
The American Council of Life Insurers and the Insurance Coalition, which represents large insurers, are asking for 30 more days to respond.
The National Association of Mutual Insurance Companies wants the deadline to be moved to Feb. 4, 2020.
The Fed has proposed a risk-based capital (RBC) framework called the “building block approach.”
The Fed’s RBC system “adjusts and aggregates existing legal entity capital requirements to determine an enterprise-wide capital requirement, together with a risk-based capital requirement excluding insurance activities,” according to a summary of a draft regulation that appeared in the Federal Register Oct. 24.
The Fed believes that a major alternative, which has been developed by the International Association of Insurance Supervisors, would penalize issuers of annuities, long-term care insurance and other products that create long-term benefits obligations.
The Fed approach “would appropriately reflect, rather than unduly penalize, long-duration insurance liabilities in the United States,” Fed officials say in the introduction to the Fed’s draft regulation.
A link to the request for comments is available here.
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