The Securities and Exchange Commission is considering giving insurers a broad exemption from the Volcker Rule—the section of the Dodd-Frank Wall Street Reform and Consumer Protection Act that restricts financial institutions from engaging in certain kinds of speculative investing.

The rule is scheduled to be implemented on July 21.

During a House Appropriations Committee subcommittee hearing on March 7, 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.

Rep. Rodney Alexander, R-La., says 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.

“Cutting off that ability to insurance companies would impact the ability of [my] constituents to guarantee for uncertainties of life,” he says, adding that the result of the Volcker rule, without the exemption, would be to make retirement and Long-Term Care insurance more costly by limiting insurers’ ability to invest in covered funds.

In response, Schapiro says the Volcker Rule, as currently scheduled to be implemented, 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 insurers. We are looking at whether there can be flexibility on this point.”