GOP senator presses Fed chief on insurance rules

Sen. Dean Heller (R-Nev.) is “deeply concerned” that the Federal Reserve could inappropriately impose tough new capital standards on the insurance industry.

In a letter to Fed Chair Janet Yellen, Heller urged caution as the Fed begins to establish new rules for large insurance companies. In particular, the Senate Banking Committee member said he was wary of the new federal rules on an industry that had previously been monitored exclusively by the states.

{mosads}“It is clear that state regulators have already been enforcing tight capital requirements,” he wrote. “With the Federal Reserve now supervising a significant number of insurance holding companies, I worry that not enough is being done to ensure that properly tailored insurance standards will be applied.”

Heller asked for details from Yellen about how she plans to treat insurance companies uniquely when it comes to new rules.

The Fed is required to set new capital standards for large players in the financial industry as part of the Dodd-Frank financial reform law. However, how the Fed handles insurance companies, compared to banks, has been a topic of some debate since that law was passed.

Congress unanimously passed legislation at the end of 2014 making clear that insurance companies should be subjected to different standards than banks. Fed officials had previously said that the way Dodd-Frank was written, they did not have the leeway to customize the rules for that industry.