Although the FRB has been promising to issue capital standards for insurance companies almost since Dodd-Frank gave it regulatory authority to do so and Congress subsequently asked the Board to accelerate these standards, the FRB has only now gradually begun to frame the capital standards governing insurance companies under its purview and the prudential requirements it will also impose on insurance companies designated as systemically-important financial institutions (SIFIs) by the FSOC. The rulemaking process was likely spurred by a key provision in the court decision revoking MetLife’s SIFI designation, with the court finding that FSOC could not properly evaluate systemic risk because it did not know what rules would apply upon designation. As other courts might well reach similar findings should the two remaining designees seek de-designation or FSOC try to name additional insurance SIFIs, the Board – a major supporter of the Dodd-Frank framework – has hastened to lay out the regulatory structure. It has done so not only for SIFIs, but also for the depository institution holding companies (DIHCs) that are principally engaged in insurance and control an insured depository institution (IDI). To date, the only DIHCs that would come under this rule own savings associations, making them also savings-and-loan holding companies (SLHCs).
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