Federal regulators Thursday moved to tighten the regulations governing the small but highly profitable forced-place homeowners insurance marketand more is on the way.

American International Group and the Federal Reserve Bank of New York (FRBNY) are at odds concerning whether the insurer has authority to sue banks over virtually worthless mortgages they sold that drove AIG to seek a federal bailout.

Legislation aimed at streamlining repayment of funds to Medicare when the program pays claims later covered by private insurers has finally been enacted into law.

A federal regulation introducing disparate impact criteria to the sale of homeowners insurance will be finalized next month, according to industry officials.

American International Group wont join or take over a lawsuit championed by the companys former Chairman and CEO, Maurice Hank Greenberg, over the governments 2008 bailout of the insurance giant.

Sen. Mike Crapo, R-Idaho, will replace Sen. Richard Shelby, R-Ala., as ranking minority member of the Senate Banking Committeea key Senate oversight panel for the insurance industry.

The board of American International Group will consider on Wednesday joining a lawsuit filed by former chairman Maurice Hank Greenberg that argues that the government was unfair to AIG shareholders when it bailed out the insurance giant in 2008.

Insurance industry officials are voicing strong support for the legislation signed into law Sunday by President Obama that raised the borrowing authority for the National Flood Insurance Program by one-third.