For the first time ever, the Federal Reserve is developing capital requirements specifically designed for insurance companies. Earlier this month, the Fed asked the public to comment on a two-tiered proposal for applying these standards, which were mandated by the Dodd-Frank Act. Together with Federal Reserve Board Governor Daniel Tarullo’s recent public comments on the subject, the agency seems to be sending three clear messages: it understands that insurance is different from banking; that systemically important insurers are different from the other insurers it supervises; and that it is not afraid to diverge from how other countries regulate insurance when it makes sense for the United States.
The Bipartisan Policy Center hosted a panel of experts who analyzed the Fed’s proposal and public comments. The panel discussed whether the Fed is moving in the right direction, how state insurance regulators are viewing the Fed’s actions, and how the Fed’s approach is being received by foreign regulators.
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Senior Advisor and Insurance Lead, Institute of International Finance
Executive Vice President and Chief Financial Officer, Prudential Financial, Inc.
Peter L. Hartt
Director, Division of Insurance, New Jersey Department of Banking and Insurance
Partner, Cypress Group
Acting Director, BPC’s Financial Regulatory Reform Initiative