Late last month, Rep. Gary Miller, R-Calif., and Rep. Carolyn McCarthy, D-N.Y., introduced the “Insurance Capital and Accounting Standards Act of 2013” (H.R. 2140 or the “Act”) into the U.S. House of Representatives. The Act is in response to last year’s proposal by the Federal Reserve Board to apply certain capital requirements for financial institutions (i.e., Basel III global capital standards) to insurance companies that are part of depository holding companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd-Frank”). Instead, if enacted, capital standards for such insurance companies would be tailored to their specific risk exposures and a rebuttable presumption would be created that compliance with state risk-based capital standards meets the requirements of Dodd-Frank. According to Congressman Miller, ““The Federal Reserve is mixing apples and oranges by imposing bank-centric rules on insurance companies, which have completely different business models and capital structures. As written, this proposal will lessen the availability and increase overall costs of insurance products and services to consumers and businesses in my district and across the country.” The American Insurance Association (AIA) has also announced its support of the Act.
The Act is currently under review by the House Committee on Financial Services. No corresponding legislation has been introduced yet in the U.S. Senate.
Click here for a copy of the Act.