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Global Insurance Industry: US Congress Skeptical Of Global Insurance Talks - by Ryan Tracy

The US Congress is ramping up scrutiny of global discussions about insurance regulations, putting pressure on the Federal Reserve and the Treasury Department as they seek an international agreement on capital rules.

At a Senate hearing on Tuesday, Republicans and Democrats pressed officials from the agencies about global discussions between the U.S. and regulators in Europe and elsewhere regarding capital rules for globally-active insurance firms.

In the House, Republicans were set to hold their own hearing on the topic Wednesday and Rep. Sean Duffy (R., Wisc.) is readying a bill that would constrain the Fed’s latitude as it writes rules for some insurance firms.

Lawmakers have been hearing for months from the insurance industry and U.S. state insurance regulators, both of whom are worried that new insurance capital rules being negotiated internationally could be imported in the U.S.

The U.S. and European approaches to insurance rules “are very fundamental different ways of viewing the world,” Kevin McCarty, Commissioner of the Florida Insurance Department, told the Senate Banking Committee Tuesday. “When you try to harmonize those two, it would create the potential for great disruption [that] potentially raises prices for consumers in the United States and potentially jeopardizes the availability of products.”

Among the fears of state regulators, he said, is that the failure of a company would be handled differently under new international rules, hamstringing state regulators who want to protect insurance policyholders even at the expense of other participants in the financial markets.

Industry officials also express worry that the Fed, which is working on regulations impacting about one-third of the industry, will use the international process as a precedent to impose rules that raise their costs or force them to restructure certain businesses.

Read more: Congress Skeptical Of Global Insurance Talks - MoneyBeat - WSJ

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