The Federal Reserve Bank of New York came under intense fire at a congressional hearing this week for its decision to allow 100 percent payback for counterparties to AIG credit default swaps after it bailed out the firm in September 2008.

Congress would complete work on financial services reform before the July 4th recess under an aggressive reconciliation conference schedule outlined Tuesday by Rep. Barney Frank, D-Mass.

Analysts raised red flags about the future of AIG at a congressional hearing, despite President Robert Benmosche's assurances that AIG is on a "clear path" to repaying the government.

The Senate agreed Monday night to pursue a change in financial services legislation that would exempt insurers that own banks or thrifts from the "proprietary trading" restrictions imposed by the "Volcker rule."

Decisions such as the FEMA's to delay charging market rates for policies sold in certain areas under the deficit-ridden NFIP, could become more common, an insurer group said.

Insurer use of consumer credit scoring for underwriting and pricing personal lines coverage was back under the glare of a congressional spotlight this month, with industry officials fending off attacks on the accuracy and fairness of such rating tools.

Association officials believe provisions aimed at modernizing the excess and surplus lines marketplace will be retained in the final version of financial reform legislation that will be reconciled between the House and Senate.

The Senate late Thursday night passed historic legislation making the most sweeping changes to financial services regulation since the Depression by a vote of 59-39.