The Insurance Capital Standards Clarification Act of 2014 () is a United States bill that would amend the

Dodd–Frank Wall Street Reform and Consumer Protection Act The Dodd–Frank Wall Street Reform and Consumer Protection Act, commonly referred to as Dodd–Frank, is a United States federal law that was enacted on July 21, 2010. The law overhauled financial regulation in the aftermath of the Great Recess ...

to "clarify the application of certain leverage and risk-based requirements". The bill was passed during the

113th United States Congress The 113th United States Congress was a meeting of the legislative branch of the United States federal government, from January 3, 2013, to January 3, 2015, during the fifth and sixth years of Barack Obama's presidency. It was composed of the ...

and signed into law on December 18, 2014.

Background

The bill was written in response to some claims by Federal reserve Board lawyers that the way the law is current written, they are required to apply rules about bank capital standards to insurance companies. A companion measure was introduced in the

United States House of Representatives The United States House of Representatives, often referred to as the House of Representatives, the U.S. House, or simply the House, is the lower chamber of the United States Congress, with the Senate being the upper chamber. Together they ...

Provisions of the bill

The bill would give states more control over the "business insurance of foreign companies doing business within the United States." The bill would revise section 171 of the

, a section which is sometimes called the "Collins Amendment". The bill would "clarify that the

Federal Reserve Board The Board of Governors of the Federal Reserve System, commonly known as the Federal Reserve Board, is the main governing body of the Federal Reserve System. It is charged with overseeing the Federal Reserve Banks and with helping implement the m ...

can apply insurance-based capital standards to the insurance portion of any insurance holding company it oversees." The change would mean that bank capital rules would be applied only to the banking portions of a business, with separate insurance capital rules being applied to insurance-related portions.

Procedural history

The Insurance Capital Standards Clarification Act of 2014 was introduced into the

United States Senate The United States Senate is the upper chamber of the United States Congress, with the House of Representatives being the lower chamber. Together they compose the national bicameral legislature of the United States. The composition and pow ...

on April 29, 2014 by Sen. Tom Coburn (R, OK). It was referred to the

United States Senate Committee on Banking, Housing, and Urban Affairs The United States Senate Committee on Banking, Housing, and Urban Affairs (formerly the Committee on Banking and Currency), also known as the Senate Banking Committee, has jurisdiction over matters related to banks and banking, price controls, ...

. On June 3, 2014, the Senate voted with

unanimous consent In parliamentary procedure, unanimous consent, also known as general consent, or in the case of the parliaments under the Westminster system, leave of the house (or leave of the senate), is a situation in which no member present objects to a prop ...

to pass the bill. The House passed the bill also by unanimous consent on December 10, 2014. It was signed by the President and became Public Law No: 113-279 on December 18, 2014.

Debate and discussion

'' The Hill'' called the bill "bipartisan". Organizations that could be affected by this change include the

American International Group American International Group, Inc. (AIG) is an American multinational finance and insurance corporation with operations in more than 80 countries and jurisdictions. , AIG companies employed 49,600 people.https://www.aig.com/content/dam/aig/amer ...

, Prudential Financial, MetLife, State Farm, and

USAA The United Services Automobile Association (USAA) is a San Antonio-based Fortune 500 diversified financial services group of companies including a Texas Department of Insurance-regulated reciprocal inter-insurance exchange and subsidiaries offeri ...

. The American Council of Life Insurers (ACLI) strongly supported the bill, purchasing advertisements in ''

Roll Call ''Roll Call'' is a newspaper and website published in Washington, D.C., United States, when the United States Congress is in session, reporting news of legislative and political maneuverings on Capitol Hill, as well as political coverage of ...

'' and ''

Politico ''Politico'' (stylized in all caps), known originally as ''The Politico'', is an American, German-owned political journalism newspaper company based in Arlington County, Virginia, that covers politics and policy in the United States and intern ...

'' to announce their support. The organization stated that "there is broad agreement on this position... The Obama administration, Democrats and Republicans in the House and the Senate, state and federal regulators and private industry all agree that life insurers should not be subject to capital standards more suited for the business of banking." According to Mark A. Hofmann, the bill was an example of "common sense" because "no one, including Fed officials, has taken to the streets demanding that the Fed take over insurance regulation."

References

External links