The National Association of Mutual Insurance Companies welcomed introduction of legislation today in both the House and Senate to instruct federal regulators on the accounting standards they use to oversee insurance-related savings and loan holding companies.
"With the introduction of legislation today, Congress is making it clear that one size does not fit all when it comes to financial services regulation," said Jimi Grande, senior vice president of federal and political affairs for NAMIC. "Banking and insurance are two very different industries, and trying to regulate one under the same rules as the other would only lead to chaos for companies and increased costs for consumers."
The Senate bill was introduced by Sens. Susan Collins, R-Maine, Sherrod Brown, D-Ohio, and Mike Johanns, R-Neb. In the House, Rep. Gary Miller, R-Calif., introduced the legislation with Rep. Carolyn McCarthy, D-N.Y.
Under Section 171 of the Dodd-Frank Act, known as the "Collins Amendment", the Federal Reserve is required to impose minimum capital requirements for both Bank Holding Companies and Savings and Loan Holding Companies. Under the new regulation, the Fed would be required to accept Statutory Accounting Principles rather than forcing insurers to convert to the banking-centric Generally Accepted Accounting Principles system.
"This legislation will simply ensure that the Fed can't force a square peg into a round hole, and we appreciate Congress’ efforts to clarify this issue," Grande said.