The Republican lawsuit targets reinsurance that helps insurance companies provide universal coverage without accounting for pre-existing conditions.
WASHINGTON -- A group of federal regulators is urging the Securities and Exchange Commission to adopt stricter rules for money-market mutual funds.
The Financial Stability Oversight Council issued the recommendations. The panel is led by Treasury Secretary Timothy Geithner.
Among the recommendations are requirements for funds to hold capital reserves against losses _ there are none right now _ and limits on how quickly investors can withdraw their money.
Money-market funds hold $2.7 trillion in assets. A run on money-market funds could pose a risk to millions of investors and companies. Regulators said changes are needed to protect the financial system.
SEC Chairman Mary Schapiro pushed for similar changes last summer but was opposed by a majority of SEC voting members.
The mutual fund industry has lobbied against the changes, saying they would make money funds so unattractive that investors could pull out of them altogether.
A big money-market fund collapsed during the 2008 financial crisis. That led the government to temporarily guarantee assets of all money funds so investors could be assured they would be protected from losses.
Federal Reserve Chairman Ben Bernanke, who is a member of the panel, said the crisis showed the "structural vulnerabilities" of money-market funds.
Members of the oversight council also include Schapiro and Martin Gruenberg, acting chairman of the Federal Deposit Insurance Corp.
The oversight council put forward its recommendations for public comment for 60 days. After the group finalizes the recommendations sometime afterward, the SEC will be required to propose changes within 90 days or explain why it failed to act.
The panel's recommendations include:
_Requiring money funds to hold capital reserves amounting to 1 percent of the fund's assets and requiring that a small percentage of an investor's account be blocked from immediate withdrawal.
_Requiring funds to hold capital reserves of 3 percent and to take other measures such as increasing the diversity of their investments.