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

The Securities and Exchange Commission is considering givinginsurers a broad exemption from the Volcker Rule, that section ofthe Dodd-Frank Wall Street Reform and Consumer Protection Act whichrestricts financial institutions from engaging in certain kinds ofspeculative investing. The rule is scheduled to be implemented onJuly 21, 2012.

In answering a question at a House Appropriations Committeesubcommittee hearing yesterday, SEC chairman Mary Schapiro said theagency is considering exempting insurer activity in covered fundsas well as investments in their general account from the Volckerrule.

The hearing was held by the Financial Services and GeneralGovernment 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 VolckerRule does not capture the intent of Congress—which is to exemptinsurance companies from the ban on investments in private-equitydeals.

He said that, "Cutting off that ability to insurance companieswould impact the ability of [my] constituents to guarantee foruncertainties of life."

He added that, the goal of the Volcker rule would makeretirement and long-term care insurance more costly by limitinginsurers' ability to invest in covered funds.

In response, Schapiro said that the Volcker Rule does not allowfor investment in covered funds by insurance company generalaccounts.

"This is a really important issue and we are reviewing thecomment letters and meeting with insurance companies," Schapirosaid. "We are looking at whether there can be flexibilityon this point."