The Senate Banking Committee will meet on Tuesday to markup the Terrorism Risk Insurance Act and are considering adding legislation to alleviate the capital standards requirement for insurance companies. In March, Senator Susan Collins (R-MA), introduced the so-called "Collins Capital Standards Amendment", that would amend the 2010 Dodd-Frank law that says large nonbank firms should meet leverage limits that are as strict as the rules that banks follow. "My legislation would ... clarify that, in establishing minimum capital requirements for holding companies on a consolidated basis, the Federal Reserve is not required to include insurers so long as the insurers are engaged in activities regulated as insurance at the state level," Collins said. The insurance industry has long urged lawmakers to not impose the capital standard requirement issued by the Dodd Frank law in that insurance companies are not structured the same way as banks and do not hold the same type of assets, therefore should not be subject to the same standards and capital requirements.
We expect other amendments as well, including the NARAB II language, passed by the House and Senate earlier this year.
Read S. 2270: Insurance Capital Standards Clarification Act of 2014