Lawmakers unveil bill to keep insurance
expert on risk panel
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[June 29, 2017]
By Sarah N. Lynch
WASHINGTON (Reuters) - The U.S. Senate
Banking Committee's top two lawmakers unveiled a bipartisan piece of
legislation on Wednesday designed to prevent a prolonged vacancy on the
federal body that determines how large insurance companies are
The proposed legislation by Senate Banking Chairman Mike Crapo and
Ranking Member Sherrod Brown would permit Roy Woodall, the independent
insurance expert on the Financial Stability Oversight Council (FSOC), to
remain in his job until a replacement can be nominated and confirmed, or
for an additional 18 months.
The FSOC is a panel of regulators with the power to dub large financial
firms, including insurers, as systemic, a tag that carries additional
oversight by the Federal Reserve.
The panel has designated a number of insurers, including Prudential
Financial Inc, American International Group Inc and Metlife.
Metlife fought the designation in court and won.
The other two still carry the designation, though Prudential is widely
expected to seek to have it rescinded. A two-thirds majority vote of
FSOC's sitting members is needed to rescind a designation.
Woodall, who previously voted against designating Metlife and
Prudential, is the only person on the panel with insurance expertise.
But his six-year term expires in September.
As there is no federal insurance regulator, Woodall is effectively the
most important figure in U.S. regulation of large insurers.
The FSOC is composed of heads of federal financial regulators and led by
U.S. Treasury Secretary Steven Mnuchin.
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Chairman of the Senate Banking, Housing, and Urban Affairs Committee
Mike Crapo (R-ID) hearing listens to testimony from Federal Reserve
Chairman Janet Yellen on the “Semiannual Monetary Policy Report to
the Congress” on Capitol Hill in Washington, U.S., February 14,
2017. REUTERS/Joshua Roberts
All of the FSOC's other members are allowed to continue serving in
their roles on expired terms, or be temporarily replaced with an
acting member if there is a vacancy.
But due to a quirk in the Dodd-Frank law, Woodall cannot be held
over or temporarily replaced after his term expires - a problem that
could leave a gap on the FSOC.
Wednesday's proposed bill will provide "much-needed clarity
regarding the independent insurance member’s term," Crapo said.
Brown added that the fix represents a "commonsense" bipartisan
It is also backed by a large list of other Republicans and Democrats
on the panel - a sign it will likely win broad support by lawmakers
(Reporting by Sarah N. Lynch; Editing by David Gregorio)
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