What Will Insurers Face on the Regulatory Front in 2015?
What are the right capital standards?
Julie Spiezio, Senior Vice President, Insurance Regulation & Deputy General Counsel, American Council of Life Insurers (ACLI)
The Federal Reserve Board is slated to propose a consolidated capital rule for life insurers it supervises in 2015. It will affect companies organized as savings and loan holding companies and SIFIs. ACLI has worked to ensure that any standards applied to us be insurance-specific and not bank-specific. We have been successful, as Congress has sent legislation to the White House that clarifies that the Fed has the authority to draft capital standards that are tailored to our industry and not to the banking industry.
But, the issue of capital standards is not under consideration in Washington alone. International standards-setters are examining the issue, too, and will soon begin setting standards that will influence activities worldwide on group capital and supervision standards for companies that are classified as internationally active groups.
A topic that is fairly new on the regulatory front relates to the use of annuities in employer-sponsored plans. For the practitioner, the acronym is QLACs, which standards for Qualified Longevity Annuity Contracts. Put simply, this is a good development. Federal agencies a few months ago gave their approvals to longevity annuities being included in 401(k)s.
There are many regulations being reviewed, challenged, and updated. We are still in the wake of the 2008 financial crisis. Rules are still being developed to help prevent another crisis. Ensuring life insurers are treated appropriately -- like life insurers and not as banks - and that rules don’t hamper our mission to help protect families financially, keeps us busy.
In addition, we’re keeping our eyes on derivatives regulation: ensuring state and federal regulations preserve life insurers' ability to manage asset and liability risks with derivatives appropriately. The fiduciary standard issue, also known as standard of care, is important. We are working to assure that SEC rulemaking implementing a harmonized standard of care for broker/dealers and investment advisers protects consumer choice and diverse distribution models.
On the state level, among many issues we’re watching activities dealing with captives. We will continue to advocate for the use of appropriately regulated captives before domestic and international regulators and standards-setting organizations.
Peggy Bresnick Kendler has been a writer for 30 years. She has worked as an editor, publicist and school district technology coordinator. During the past decade, Bresnick Kendler has worked for UBM TechWeb on special financialservices technology-centered ... View Full Bio
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