Washington, D.C. – Aaron Klein, director of the Financial Regulatory Reform Initiative (FRRI) at the Bipartisan Policy Center, issued the following statement regarding the passage of S. 2270, the Insurance Capital Standards Clarification Act of 2014:
“Yesterday the U.S. Senate took an important step to improving the implementation of the Dodd-Frank Act by passing S.2270, the Insurance Capital Standards Clarification Act of 2014. This common sense bill clarified that the Federal Reserve has the legal flexibility to properly tailor regulatory capital standards for insurance companies that are appropriate to the specific risks and needs of insurance companies and not based on bank capital rules. As a result of Dodd-Frank, the Federal Reserve is the regulator of many insurance companies throughout the nation and this common sense technical clarification should improve the quality of regulation.
“Having testified on this issue in March, I applaud the Senate for passing this important legislation. Senators Brown, Johanns and Collins worked across party lines to craft and pass through the Senate wise legislation to fix an unanticipated problem in the implementation of Dodd-Frank. Enactment of this legislation can improve the quality of regulation and could prevent a potential serious problem of applying rules for banks to insurance companies.
“I hope that this legislation becomes law and signals the beginning of a period where Congress comes together to pass technical corrections that continue to improve Dodd-Frank.”