Filed Under:Carrier Innovations, Regulation/Legislation

Senators Join Industry in Calling on Regulators to Avoid Bank-Centric Rules for Insurers

Ahead of a comment-period deadline, almost two dozen members of the Senate from both sides of the aisle sent a letter to the top federal-banking regulators warning them that the application of a bank-centric capital regime to the insurance industry would fundamentally alter the nature of the business, undermine prudential supervision and unintentionally harm insurance policyholders. 

The letter, also sent to the heads of the Federal Deposit Insurance Corporation (FDIC) and the Office of the Comptroller of the Currency (OCC), raised the question of Congress’ intent in designing the rules—namely that insurers should be treated differently in line with their business models.

The senators point to a need for the regulators to acknowledge how insurance companies rely upon long-term assets to fund long-term liabilities while banks use a variety of bonds, equity, and short-term debt to fund their operations. 

Insurers have repeatedly made the case that bank liabilities are short-term and assets are long-term while the opposite is true of insurance, which has liquid assets but longer-term liabilities. 

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