US insurers large enough to threaten the financial system will probably face simpler and cheaper capital standards than those imposed on Wall Street banks, Federal Reserve Governor, Daniel Tarullo has said. The Fed's top official said that while he was not aware of any specific plans for such a move, it would be "prudent" if regulators were able to impose more stringent rules in response to “Compliance costs for these firms should be considerably lower than if they had to conform to the bank holding company capital regime,” he added. The treatment will be “more appropriate for the longer-term nature of most insurance liabilities.” The Federal Reserve will seek opinion on its plan for insurance industry rules mandated by the Dodd-Frank Act.
US insurers large enough to threaten the financial system will probably face simpler and cheaper capital standards than those imposed on Wall Street banks, Federal Reserve Governor, Daniel Tarullo has said. Under the proposal, companies such as AIG and Prudential Financial would get regulations assessing their capital in a fairly simple set of risk categories. “Compliance costs for these firms should be considerably lower than if they had to conform to the bank holding company capital regime,” he added. The treatment will be “more appropriate for the longer-term nature of most insurance liabilities.” The Federal Reserve will seek opinion on its plan for insurance industry rules mandated by the Dodd-Frank Act.