(Bloomberg) — American International Group Inc. and Prudential Financial Inc. would face new capital standards that are less stringent than those imposed on Wall Street banks under a long-awaited Federal Reserve proposal that's meant to limit the chance a major insurer could threaten the financial system.
Longer-term nature of most insurance liabilities
The Fed's plan subjects AIG and Prudential to a narrow set of categories by which they would have to measure the riskiness of their assets, the central bank said in a statement. While the proposal to be voted on Friday makes clear that the companies' will be treated in a way that's "appropriate for the longer-term nature of most insurance liabilities," the Fed didn't detail how it will determine the minimum capital the firms must maintain against their assets.
"This proposal is an important step toward capital standards that are both appropriate for our supervised insurance firms and that enhance the resiliency and stability of our financial system," Fed Chair Janet Yellen said in remarks prepared for the Friday board meeting.
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