FED ASKS INSURERS FOR MORE DATA ON CAPITALISATION

The Federal Reserve has in the past 24 hours asked large insurers for additional data as it seeks to study the impact that stiffer capital rules following the financial crisis may have on the companies. The Fed sent the letter of request and a survey form to about 20 companies, including AIG and Prudential, the two non-banks that have been designated as “systemically important financial institutions”, or SIFI. Under the 2010 Dodd-Frank financial reforms, US financial regulators were directed to identify SIFI companies, a designation that subjects them to Fed scrutiny and more stringent capital and liquidity rules. Several insurers, including preliminary SIFI designee MetLife, have objected that insurers should not be held to the same capital requirements as banks. The Fed is conducting the survey as part of its effort to design capital rules better tailored for insurers. However, the Fed said that a new capital framework for SIFI insurers still must comply with the Dodd-Frank law’s Collins amendment, which established a minimum capital level for insurers.