This Day On The Street
Continue to site right-arrow
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Senate OKs Systemic Insurance Capital Measure

Stocks in this article: PRU AIG MET

NEW YORK (The Deal) -- Under intense pressure from insurance companies, the Senate late Tuesday approved a measure that would give the Federal Reserve authority to set up liquidity and capital rules specifically for "systemically important" insurers, rather than subjecting them to tougher bank-like capital regulations.

The issue is critical to large insurers Prudential Financial (PRU) and American International Group (AIG), which have been designated by federal regulators as "Systemically Important Financial Institutions," or SIFIs, because of concerns over the collateral impact to the economy if they were to collapse.

MetLife (MET), another insurer, also is being evaluated as a potential SIFI and likely will be designated as one shortly, according to people familiar with the situation.

The Federal Reserve is required by a measure in the post-crisis Dodd-Frank Act known as the Collins Amendment to impose bank capital requirements on designated insurance companies unless there is a legislative fix.

The Senate approved the insurance measure by unanimous consent, which means that there was no formal vote by individual Senators on the provision.

The move indicates that the provision is likely to be approved by the House and President Barack Obama fairly soon as long as House Republicans don't seek to add additional items to the measure that Democrats would oppose. Rep. Gary Miller, R-Calif., introduced a similar companion bill in the House.

"There is broad bipartisan agreement that providing traditional life, property and casualty insurance is different from banking," said Sen. Sherrod Brown, D-Ohio, and one of the key sponsors of the measure. "I want strong capital standards, but they have to make sense. Applying bank standards to insurers could make the financial system riskier, not safer. That is why the Federal Reserve must recognize the differences between the industries and ensure that institutions engaging in insurance are not held to the same capital requirements as traditional banks."

1 of 2

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Markets

DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs