The White House appears likely to support legislation allowing the Federal Reserve Board to apply insurance-based capital standards to the insurance portion of any insurance holding company it oversees, the president and CEO of the American Council of Life Insurance said today.
Indeed, the bill will be "well-received at the White House," Dirk Kempthorne said at the opening general session of the ACLI annual conference, now underway at the JW Marriott Hotel in Washington.
There are two different versions of the legislation, both aimed at amending the so-called "Collins amendment" to the Dodd-Frank Act that will clarify that the Federal Reserve Board clarifying that the Fed can use State Accounting Principles, or SAP, in overseeing insurers regulated as systemically important financial institutions, or those that operate thrift holding companies.
Kempthorne also said the administration is open to listening to the industry's concerns about the Department of Labor's initiatives for creating a fiduciary standard for sale of investment products regulated under the Employee Retirement Income Security Act or ERISA.
Kempthorne said he raised this issue with Denis McDonough, White House chief of staff, when he met with McDonough on the Fed regulation issue. Kempthorne said the DOL proposal would create a "one-size-fits all regulatory approach to sales and distribution" of retirement products regulated under ERISA.
"In practice, it would make it difficult, if not impossible, for agents and brokers to assist retirees with their lifetime income needs," Kempthorne said in his comments today. He also said the DOL proposal "would likely limit or eliminate the availability of the very guidance that middle and low income Americans need."
He said this issue was also discussed at a meeting "just last Wednesday" with Labor Secretary Thomas Perez and Jeffrey Zients, assistant to the president for economic policy.
Kempthorne said he told Perez and Zients that "the imposition of ERISA fiduciary duties on all agents and brokers is both impractical and unnecessary," and he noted that "agents and brokers already are heavily regulated by the states and the SEC." Moreover, he said, "the insurance sales industry is well regulated and policed."
