SEC Considers Volcker Rule Exemption for Insurers

SEC Chair Mary Schapiro (AP Photo/Harry Hamburg) SEC Chair Mary Schapiro (AP Photo/Harry Hamburg)

NU Online News Service, March 8, 2:30 p.m. EST

The Securities and Exchange Commission is considering giving insurers a broad exemption from the Volcker Rule, that section of the Dodd-Frank Wall Street Reform and Consumer Protection Act which restricts financial institutions from engaging in certain kinds of speculative investing. The rule is scheduled to be implemented on July 21, 2012.

In answering a question at a House Appropriations Committee subcommittee hearing yesterday, SEC chairman Mary Schapiro said the agency is considering exempting insurer activity in covered funds as well as investments in their general account from the Volcker rule.

The hearing was held by the Financial Services and General Government Subcommittee of the House Appropriations Committee.

Rep. Jo-Ann Emerson (R-Mo.) heads the subcommittee.

Schapiro’s comment was made in response to a question from Rep. Rodney Alexander (R-La.).

Alexander said the current proposal for implementing the Volcker Rule does not capture the intent of Congress—which is to exempt insurance companies from the ban on investments in private-equity deals.

He said that, “Cutting off that ability to insurance companies would impact the ability of [my] constituents to guarantee for uncertainties of life.”

He added that, the goal of the Volcker rule would make retirement and long-term care insurance more costly by limiting insurers’ ability to invest in covered funds.

In response, Schapiro said that the Volcker Rule does not allow for investment in covered funds by insurance company general accounts.

“This is a really important issue and we are reviewing the comment letters and meeting with insurance companies," Schapiro said. “We are looking at whether there can be flexibility on this point."

Originally published on LifeHealthPro. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Comments

Resource Center

View All »

Complimentary Case Study: Helping achieve your financial goals By:...

Find out how a Special Investigation Unit used TLOxp to save the company money and...

Do Your Clients Hold The Right CDL License?

Learn about the various classes of CDL Licenses and the industries that are impacted by...

Integrated Content & Communications: A Key Business Issue For Insurers

Insurers are renewing their focus on top line growth, and many are learning that growth...

High Risk Insurance Coverage in the E&S Market

Experts discuss market conditions, trends and projected growth in a rapidly changing niche.

Top E-Signature Security Requirements

This white paper covers the most important security features to look for when evaluating e-signatures...

EPLI Programs Crafted Just For Your Clients

Bring us your restaurant clients, associations and other groups and we’ll help you win more...

Is It Time To Step Up And Own An Agency?

Download this eBook for insight on how to determine if owning an agency is right...

Claims - The Good The Bad And The Ugly

Fraudulent claims cost the industry and the public thousands of dollars in losses. This article...

Leveraging BI for Improved Claims Performance and Results

If claims organizations do not avail themselves of the latest business intelligence (BI) tools, they...

Top 10 Legal Requirements for E-Signatures in Insurance

Want to make sure you’ve covered all your bases when adopting e-signatures? Learn how to...

PropertyCasualty360 Daily eNews

Get P&C insurance news to stay ahead of the competition in one concise format - FREE. Sign Up Now!

Advertisement. Closing in 15 seconds.