Previously, the Council had requested public input on its Dodd-Frank Act "Second Notice of
AIA requested additional revisions to the proposed rule and to the guidance so that the rule would follow Section 113's fundamental premise: to designate only those companies for heightened prudential supervision that are a source of systemic risk. AIA's recommendations included incorporating the guidance into the final rule, modifying the metrics used to evaluate companies in the first stage, and utilizing qualitative measures such as degree of regulation, substitutability, and an orderly resolution system as a way to screen companies out of the SIFI process.
Based upon a review of the fact sheet issued by the Council following today's unanimous vote, it adopted a final rule similar to the rule it proposed under the Second NPR in
"By incorporating risk-related metrics in the process, the final rule reflects improvement over the first proposed rule. AIA hopes that the Council will use the designation sparingly and apply it only to the companies that pose a systemic threat to U.S. financial stability.
"AIA maintains the position that property-casualty insurers engaged in regulated insurance activities do not pose a threat to financial stability and therefore should be screened out of the SIFI designation process. As we have stressed all along, AIA believes that if members of the Council correctly incorporate and apply risk-related factors in the final rule, they will conclude that property-casualty insurers are not the types of companies that should be subjected to heightened prudential supervision. The industry business model, the supporting regulatory architecture, the large number of competitors, and conservative management and investment practices employed in the property-casualty insurance industry help reinforce that conclusion."
TNS CT21CT-120404-3829515 61ChengTacorda
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|Source:||Targeted News Service|