The Board of Governors of the Federal Reserve System ("FRB") solicited comment on the proposed application of enhanced prudential standards for "systemically important insurance companies."
The FRB specified that the enhanced prudential standards would apply to any nonbank financial company that:
- the Financial Stability Oversight Council determined should be supervised by the FRB and subjected to enhanced prudential standards; and
- has 40% or more of its total consolidated assets related to insurance activities by the end of either of the two most recently completed fiscal years.
The FRB requested comments on "all aspects of the proposed rule," the 40% threshold contained in the proposed definition of "systemically important insurance company," and whether an alternative measure to the threshold would be more appropriate.
The FRB noted that as of the date on which its proposal was published in the Federal Register, only two companies would be required to comply with the enhanced prudential standards, if the standards are adopted as proposed. It also stated that the corporate governance and risk-management standard would build on the core provisions of the FRB's Supervision and Regulation Letter 12-17, which addresses the consolidated supervision framework for large financial institutions.
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