WASHINGTON—Spokesmen for insurance-trade groups insistthat when all is said and done, officials of the FinancialStability Oversight Council will support insurers' view thatinsurance activities by their very nature do not pose a threat tothe stability of the U.S. financial system.

J. Stephen Zielezienski, American Insurance Association generalcounsel, says, “By incorporating risk-related metrics in theprocess, the final rule reflects improvement over the firstproposed rule.”

He adds, “AIA hopes that [the FSOC] will use the designationsparingly and apply it only to the companies that pose a systemicthreat to U.S. financial stability.”

He notes that AIA believes property and casualty insurers shouldbe screened out of the systemically important financialinstitutions (SIFI) designation since they do not pose a threat tofinancial stability.

Jimi Grande, senior vice president, federal and politicalaffairs for the National Association of Mutual Insurance Companies,makes a similar point, stating, “To the extent that the final ruleis similar to the proposed rule from October of last year, the FSOCseems properly focused on the type of institutions whichexperienced the most difficulty during the financial crisis.”

Ben McKay, senior vice president of federal government relationsfor the Property Casualty Insurers Association of America issuing astatement supporting the final rule.

“The final FSOC rule takes important steps to recognize thattraditional home, auto and business insurance activities are notsystemically important,” McKay says.

He adds that the Dodd-Frank Act appropriately treated insurancevery differently than other sectors of the financial servicesindustry.