NU Online News Service, Oct. 4, 9:51 a.m.EDT

WASHINGTON—Treasury Secretary Timothy Geithner is expected to beon the hot seat Thursday as both the Senate and House bankingcommittees take turns grilling him during a long-delayed hearing onthe policies and regulations of the Financial Stability OversightCouncil (FSOC).

Legislators are expected to question the precise measurementsthe FSOC will use in requiring insurers to be regulated by the FSOCif they are deemed "systemically significant."

They will also ask whether the FSOC is overdoing it by requiringdata from financial companies that duplicates current reportingrequirements already provided to other regulators.

Geithner is testifying just one week after the independentmember of the FSOC with insurance expertise, Roy Woodall, wasconfirmed by the Senate for a six-year term.

The FSOC was established under the Dodd-Frank financial servicesreform law to ensure that financial problems at large insurers andbrokerages as well as banks do not cause another financialcrisis.

Geithner is also expected to be asked about the role the FederalInsurance Office, also established under Dodd-Frank, will play inoverseeing the insurance industry. The industry and Republicanmembers of the committee want states to remain the primary overseerof insurance companies, with the federal government just playing anadvisory role in the absence of a crisis involving insurers.

Large insurers have already asked members of Congress topressure the FSOC to re-propose the rule by which the FSOCestablishes the criteria for designating an insurer as systemicallysignificant.

Insurers are wary of such a designation because it will allowthe Federal Reserve Board to oversee them, thereby imposingadditional regulation.

Insurers also oppose the designation because it would givefederal regulators authority to potentially impose a 3 percentadditional-capital charge on designated companies and force them tocontribute up front to a fund the FDIC would use to wind down atrouble financial company, whether it be an insurer, bank orsecurities firm.

No insurance companies have been identified yet as SIFIs, orsystemically important financial institutions.

House Republicans are expected to inquire about overlappingregulations and ask what actions the Treasury Department is takingstreamline or eliminate existing regulations for the financialservices industry, as promised earlier.

Geithner was previously supposed to testify on the first annualFSOC report. The report was issued in July, but Geithner requesteda delay because he was busy dealing with solvency issues, manyconcerning troubled European countries.

In a letter, Republicans write to Geithner, "As concern mountsabout the effect that regulatory overkill is having on economicgrowth and employment, we are writing to request that you providethe committee with a report on what the [FSOC] is doing to identifyand eliminate unnecessary or duplicative regulatory burdens."

It adds, "…we have seen no evidence in the year since Dodd-Frankwas enacted of any efforts by the administration to 'streamline andsimplify' regulations."

Geithner had formerly stated he would take such streamliningsteps in an Aug. 2, 2010 speech.