The Property Casualty Insurers Association of America (PCI) is encouraging the House to advance a bill that sets new rules on the Financial Stability Oversight Council (FSOC).
The Financial Stability Oversight Council (FSOC) Improvement Act (H.R. 4061) would require FSOC when considering a company for systemic risk designation, to provide “with specificity the basis for so identifying the company.” A company would then have a chance to comment or develop a plan to modify its operations to mitigate the systemic risk FSOC has identified.
“The overwhelming consensus among insurance experts is that traditional Insurance activities are not systemically risky. But in the past, that has not stopped FSOC from designating some insurers as systemically risky and then refusing to provide a clear path toward de-designation,” Nat Wienecke, senior vice president of federal government relations at PCI, said.
The FSOC Improvement Act was approved by the House Financial Services Committee in January by a vote of 45-10. It is now before the full House.
“PCI has long-argued for a clear off-ramp for companies to take action to eliminate activities that FSOC believes pose systemic risk. When FSOC fails to provide an off-ramp, it causes Dodd-Frank to fail in its mission to eliminate perceived systemic threats to the economy. This bipartisan bill is a solution,” Wienecke said.
The House bill was introduced by Reps. Dennis Ross (R-FL) and John Delaney (D-NJ).
“PCI commends Representatives Ross and Delaney for introducing this important legislation. We urge the House to pass the Financial Stability Oversight Council Improvement Act and work with the Senate on final legislation to send to the president expeditiously,” Wienecke added.