NU Online News Service, Oct. 6, 1:27 p.m. EDT

While legislators were expected to get answers today on measurements the Financial Stability Oversight Council will use in designating insurers as "systemically significant," Treasury Secretary Timothy Geithner says a meeting next week will offer clarity on that issue.

In comments today before the Senate Banking Committee on the FSOC, Geithner says an FSOC meeting next week will attempt to adopt a framework outlining how companies will be deemed systemically important financial institutions (SIFIs), and therefore subject to federal as well as state regulation.

The Treasury Department says the FSOC meeting will be its first with insurance expert Roy Woodall as a voting member, and that the first item on the agenda will be, "Second notice of proposed rulemaking and guidance on the authority to require supervision and regulation of certain nonbank financial companies."

In comments on the issue, Blain Rethmeier, a spokesman for the American Insurance Association, says, "AIA will be tracking this meeting very closely.  The rulemaking as it applies to nonbank financials is of primary interest to our association and having Mr. Woodall on the panel should add a new dynamic."

Jimi Grande, senior vice president for federal and political affairs for the National Association of Mutual Insurance Companies, says, "NAMIC has argued since the financial crisis began that property and casualty insurance does not pose a systemic risk to the broader economy."

He adds, "Secretary Geithner's testimony shows that the FSOC is rightly focusing their efforts on those segments of the economy that pose such a systemic risk, and we hope this will be seen in the framework for designating systemically important financial institutions that the FSOC will be considering at its meeting next week."

Ben McKay, senior vice president of federal government relations for the Property Casualty Insurers Association of America (PCI) says, "We are encouraged that next week Treasury will repropose their rule for nonbank financial institutions, including insurers. The new rule needs to bring additional certainty for insurers and provide objective measurements, not subjective criteria."

Treasury Undersecretary Neal Wolin told the Senate Banking Committee in July that the SiFi proposal for non-banks would be re-proposed after insurance-industry officials contended in comment letters and other statements that the initially proposed rule was not specific enough as to the criteria that would be used in designating a non-bank as "SiFi."

In his July remarks, Wolin said the new proposal will include "specific metrics that will help provide clarity on the FSOC's evaluation of firms for potential designation."