The National Association of Mutual Insurance Companies welcomed a Senate hearing on legislation to ensure that different financial industries are regulated according to appropriately focused capital standards.
“In financial regulation, one size does not fit all,” said Jimi Grande, senior vice president of federal and political affairs for NAMIC. “Attempting to force insurance companies to adhere to bank-centric rules would only create added cost and confusion for companies and regulators, without any benefit for consumers.”
Under the Dodd-Frank Act, the Federal Reserve Board was granted regulatory authority over non-bank companies organized as savings and loan holding companies, which includes some insurers. An amendment added to the law during debate by Sen. Sue Collins, R-Maine, further established a specific standard for that regulation, which the Fed has said requires it to impose a bank-centric regime with little flexibility. Collins has disputed this, saying it was not Congress’ intent to force inappropriate regulation onto insurance companies.
“At every turn, virtually every member of Congress involved with drafting and passing the Dodd-Frank Act has said he or she did not intend to force banking regulations on insurers,” Grande said.
At a hearing today the Senate Banking Housing and Urban Affairs Subcommittee on Financial Institutions and Consumer Protection will hear from a number of insurance experts about the problems the Fed’s current position poses, while Collins will provide her views as to the intent of her amendment. Legislation introduced by Sen. Sherrod Brown, D-Ohio, chair of the subcommittee, would clarify the Dodd-Frank Act to exempt insurers from the Collins Amendment.
“The intricacies of financial regulation and capital standards are not an issue that makes for headlines, and we’re grateful for Senator Brown’s leadership in keeping this issue on the committee’s agenda,” Grande said. “We hope that the full committee, and the full Senate, will act swiftly to pass the legislation to ensure that the Fed uses regulatory standards that are appropriate to the companies being regulated.”
Director, Federal Public Affairs