FSOC Votes on Guidelines for Designating Insurers as Systemically Significant

The Financial Stability Oversight Council today approved the final regulation governing the factors it will use to determine whether an insurer is “systemically significant.”

The final rule is consistent with the regulation proposed by the new agency in November. The FSOC unanimously passed the rule.

One change in the final rule from the proposal is that it clarifies the applicability of the confidentiality provisions to information collected by the FSOC as part of the determination process.

The final rule also provides additional information on both the method and frequency of calculating Stage 1 thresholds—the initial criteria used to determine whether an institution should be subject to additional criteria that would lead it to be judged a SIFI.

The FSOC says it intends to apply uniform quantitative thresholds to a broad group of nonbank financial companies in Stage 1 to help identify companies for further evaluation.

The FSOS explains that a nonbank financial company will be subject to further evaluation if it has at least $50 billion of total consolidated assets and meets or exceeds any one of the following thresholds:

  • $30 billion in gross notional credit default swaps outstanding for which the nonbank financial company is the reference entity.
  • $3.5 billion in derivative liabilities.
  • $20 billion of total debt outstanding.
  • 15 to 1 leverage ratio, as measured by total consolidated assets (excluding separate accounts) to total equity; or
  • 10 percent ratio of short-term debt (having a remaining maturity of less than 12 months) to total consolidated assets.

In addition, the FSOC “may consider any nonbank financial company for a determination if the FSOC believes the company could pose a threat toU.S.financial stability,” the proposal says.

Comments

Resource Center

View All »

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

Find out how a Special Investigation Union 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.