The Treasury Department is calling for looser regulation of insurance companies under the Dodd-Frank Act.
In a report released last week, the Treasury said that regulators should stop regulating insurers based on size in order to focus on the companies’ actual activities. A change in the way insurers are regulated would require Congress to amend the Dodd-Frank Act.
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“Treasury’s position is that entity-based systemic risk evaluations of insurance companies are generally not the best approach for mitigating risks arising from insurance,” the Treasury said in the report. “Instead, insurance regulators should focus on potential risks arising from insurance products and activities, and on implementing regulations that strengthen the insurance industry as a whole.”
Currently, banks and certain financial companies with more than $50 billion in assets – dubbed “systemically important financial institutions” (SIFIs) – have to abide by tighter rules than other firms and receive closer federal scrutiny, according to a report by
The Hill.
Several insurance companies designated as SIFIs faced such heightened scrutiny in the wake of the 2008 financial crisis. A federal court struck down the government’s designation of
MetLife as a SIFI, and Prudential is fighting its designation,
The Hill reported.
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