WASHINGTON (Reuters) - The U.S. House of Representatives on Wednesday approved a bill giving big insurance companies such as American International Group Inc and Prudential Financial Inc relief from part of the 2010 Dodd-Frank oversight law.
Lawmakers agreed to give the U.S. Federal Reserve more authority to tailor the capital requirements it places on big insurers. The U.S. Senate approved the change in June, and it now goes to President Barack Obama for his signature.
“The Fed now has the opportunity to write rules that will preserve competition and ensure affordable access to financial security,” MetLife Inc Chief Executive Officer Steven Kandarian said in a statement.
Global regulators want banks to rely less on debt and more on shareholder equity in an effort to make them more stable after the 2007-2009 financial crisis.
Dodd-Frank applied the same strict standard to big insurers and other non-bank companies that regulators believe are risky enough that their failure could threaten markets.
Insurers, however, said their business models were too different from banks’ to justify identical capital rules. They said insurers hold different assets than banks do and are not subject to runs on their businesses in crises.
Lawmakers, including Republican Senator Susan Collins, who wrote the relevant section of Dodd-Frank, and many regulators supported changing the law to give the Fed flexibility to write rules specifically aimed at insurers.
The House passed legislation in September making that adjustment, but it also included other changes to Dodd-Frank that the Democrat-controlled Senate would not accept. On Wednesday, the House approved the Senate version.
Reporting by Emily Stephenson; Editing by Lisa Shumaker