This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

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new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

25349 

Vol. 77, No. 83 

Monday, April 30, 2012 

1 12 U.S.C. 5389. 

2 76 FR 77442 (December 13, 2011). 

3The Philadelphia Contributionship, History, 

http://www.contributionship.com/history/ 

index.html. 4 Iowa Code Ann. (West) § 521A.14. 

FEDERAL DEPOSIT INSURANCE 

CORPORATION 

12 CFR Part 380 

RIN 3064–AD89 

Mutual Insurance Holding Company 

Treated as Insurance Company 

AGENCY: Federal Deposit Insurance 

Corporation (FDIC). 

ACTION: Final rule. 

SUMMARY: The FDIC is issuing a final 

rule (‘‘Final Rule’’) that treats a mutual 

insurance holding company as an 

insurance company for purposes of 

Section 203(e) of the Dodd-Frank Wall 

Street Reform and Consumer Protection 

Act (the ‘‘Dodd-Frank Act’’). The Final 

Rule clarifies that the liquidation and 

rehabilitation of a covered financial 

company that is a mutual insurance 

holding company will be conducted in 

the same manner as an insurance 

company. The Final Rule harmonizes 

the treatment of mutual insurance 

holding companies under Section 203(e) 

of the Dodd-Frank Act with the 

treatment of such companies under state 

insurance company insolvency laws. 

DATES: The effective date of the Final 

Rule is May 30, 2012. 

FOR FURTHER INFORMATION CONTACT: 

R. Penfield Starke, Assistant General 

Counsel, Legal Division, (703) 562– 

2422; Mark A. Thompson, Counsel (703) 

562–2529; Elizabeth Falloon, Counsel 

(703) 562–6148; Timothy F. Danello, 

Counsel (703) 562–6338, Legal Division; 

or Hashim Hamandi, Section Chief 

Policy Section, Office of Complex 

Financial Institutions, (202) 898–6884. 

SUPPLEMENTARY INFORMATION: 

I. Background 

Title II of the Dodd-Frank Act 

provides for the appointment of the 

FDIC as receiver of a nonviable financial 

company that poses significant risk to 

the financial stability of the United 

States (a ‘‘covered financial company’’), 

outlines the process for the orderly 

liquidation of a covered financial 

company following the FDIC’s 

appointment as receiver and provides 

for additional implementation of the 

orderly liquidation authority by 

rulemaking. The Final Rule is 

promulgated pursuant to Section 209 1

of the Dodd-Frank Act, which 

authorizes the FDIC, in consultation 

with the Financial Stability Oversight 

Council, to prescribe such rules and 

regulations as the FDIC considers 

necessary or appropriate to implement 

Title II. Section 209 of the Dodd-Frank 

Act further provides that, to the extent 

possible, the FDIC should seek to 

harmonize rules and regulations 

promulgated under Section 209 with the 

insolvency laws that would otherwise 

apply to a covered financial company. 

On December 13, 2011, the FDIC 

published a Notice of Proposed 

Rulemaking (‘‘NPR’’) in the Federal 

Register 2 setting forth the conditions 

under which a mutual insurance 

holding company would be resolved as 

an insurance company under Section 

203(e) of the Dodd-Frank Act. The 

comment period for the NPR closed on 

February 13, 2012, and the FDIC 

received four comment letters. 

Additionally, the FDIC held a 

conference call with representatives of 

the National Association of Insurance 

Commissioners on January 17, 2012 and 

received their comments on the NPR. 

In light of the comments received and 

pursuant to the authority granted to it 

by Section 209 of the Dodd-Frank Act, 

the FDIC is issuing the Final Rule. 

History of Mutual Insurance Holding 

Company 

The mutual insurance industry traces 

its roots back to England, where, in 

1696, the first mutual fire insurer was 

established. The first American mutual 

insurance company, the Philadelphia 

Contributionship for the Insurance of 

Houses from Loss by Fire, was founded 

in 1752.3

Mutual insurance companies have no 

equity interests. Membership rights are 

held by their policyholders. 

Policyholders are entitled to vote for 

members of the company’s board of 

directors and may receive special 

dividends in the form of capital 

distributions or reductions of policy 

premiums. 

The mutual insurance holding 

company structure was first created in 

Iowa in 1995.4 A mutual insurance 

holding company is created through the 

restructuring of a mutual insurance 

company into two entities, a mutual 

insurance holding company and a stock 

insurance company that is converted 

from the original mutual insurance 

company. In a variation of this 

restructuring, a third entity may be 

formed, an intermediate insurance stock 

holding company. In this three-entity 

structure, in most instances, the mutual 

insurance holding company initially 

owns 100% of the intermediate 

insurance stock holding company, and 

the intermediate insurance stock 

holding company initially owns 100% 

of the stock of the converted mutual 

insurance company. The purpose of the 

restructuring is to preserve the benefits 

of a mutual form of organization while 

allowing the converted mutual 

insurance company access to capital 

markets either through sale of its stock 

or, in a three-entity structure, the sale of 

the stock of the intermediate insurance 

stock holding company. 

Consistent with the mutual insurance 

company, a mutual insurance holding 

company also has no equity interests. 

Membership rights are held by the 

policyholders of the converted mutual 

insurance company who have rights 

similar to those they had as 

policyholders of the mutual insurance 

company before conversion. 

Policyholders of the converted mutual 

insurance company are entitled to vote 

for members of the mutual insurance 

holding company’s board of directors, 

and may receive special dividends in 

the form of capital distributions or 

reductions of policy premiums. 

A majority of the states have adopted 

statutes providing for the formation of 

mutual insurance holding companies. 

Those statutes generally (a) provide for 

the regulation of a mutual insurance 

holding company at the holding 

company level by the insurance 

commissioner of the domiciliary state; 

(b) require that the mutual insurance 


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25350 Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Rules and Regulations 

5E.g., Iowa Code Ann. (West) 521A.14(4), 215 Ill. 

Comp. Stat. Ann. (West) 5/59.2(1)(f)(v), and Neb. 

Rev. Stat. § 44–6125(6)(g). 

6 12 U.S.C. 5383(e)(1). 

7 12 U.S.C. 5381(a)(13). 

8There is support in the legislative history of the 

Dodd-Frank Act for interpreting the term 

‘‘insurance company’’ under Section 201(a)(13) to 

include a mutual insurance holding company. See 

statement of Rep. Barney Frank, 111 Cong. Rec. 

H5216 (daily ed. June 30, 2010) and statement of 

Sen. Christopher Dodd, 111 Cong. Rec. S5903 (daily 

ed. July 15, 2010). 

9 76 FR 77442 (December 13, 2011). 

10 12 U.S.C. 5383(e)(1). 11 12 U.S.C. 5383(e). 

holding company maintain voting 

control over the converted mutual 

insurance company; and (c) specifically 

subject a mutual insurance holding 

company to liquidation or rehabilitation 

under the state regime if the converted 

mutual insurance company is placed in 

liquidation or rehabilitation. In 

addition, either by statute, rule or 

regulation, in the liquidation of a 

converted mutual insurance company, 

the assets of the mutual insurance 

holding company generally are included 

in the estate of the converted mutual 

insurance company being liquidated.5

Treatment of an Insurance Company 

Under Section 203(e) of the Dodd-Frank 

Act 

In providing for the orderly 

liquidation of a covered financial 

company under Title II of the DoddFrank Act, Congress recognized that 

insurance companies historically had 

been liquidated and rehabilitated 

pursuant to a state insolvency 

framework. As a result, Congress 

provided that ‘‘if an insurance company 

is a covered financial company or a 

subsidiary or affiliate of a covered 

financial company, the liquidation or 

rehabilitation of such insurance 

company, and any subsidiary or affiliate 

of such company that is [an insurance 

company], shall be conducted as 

provided under applicable State law.’’ 6

The term ‘‘insurance company’’ is 

defined in Section 201(a)(13) of the 

Dodd-Frank Act to mean ‘‘any entity 

that is—(A) engaged in the business of 

insurance; (B) subject to regulation by a 

State insurance regulator; and (C) 

covered by a State law that is designed 

to specifically deal with the 

rehabilitation, liquidation, or insolvency 

of an insurance company.’’ 7 The 

identical definition is found in Section 

380.1 of Title 12 of the Code of Federal 

Regulations. Concerns have been raised 

with respect to the application of this 

definition to mutual insurance holding 

companies because, under applicable 

state laws, a mutual insurance holding 

company generally is prohibited from 

selling policies of insurance. Thus, a 

mutual insurance holding company 

arguably does not fit squarely within a 

literal reading of the statutory definition 

of insurance company under the DoddFrank Act. 

The treatment of a mutual insurance 

holding company, under certain 

circumstances, as an insurance 

company for purposes of Section 203(e) 

is consistent with the legislative intent 

of the Dodd-Frank Act.8 This treatment 

is appropriate given the legal structure 

that forms a mutual insurance holding 

company from a converted mutual 

insurance company and the continuing 

interest of the policyholders of the 

converted mutual insurance company in 

both the converted mutual insurance 

company, as its customers, and the 

mutual insurance holding company, as 

holders of its membership interests. 

From a regulatory policy perspective, 

the extensive regulation of the mutual 

insurance holding company by the 

insurance commissioner of its 

domiciliary state and the inclusion of 

the mutual insurance holding company 

and its assets in the liquidation of the 

converted mutual insurance company 

also support this treatment. 

II. Notice of Proposed Rulemaking: 

Summary of Comments 

On December 13, 2011, the FDIC 

invited public comment on a Notice of 

Proposed Rulemaking: Mutual 

Insurance Holding Company Treated as 

Insurance Company (the ‘‘Proposed 

Rule’’).9 The comment period ended on 

February 13, 2012. The FDIC received 

four comment letters from several 

industry and trade organizations 

representing the insurance industry and 

one individual. In addition, the FDIC 

met with representatives of the National 

Association of Insurance Commissioners 

to discuss the Proposed Rule. 

The Proposed Rule clarified that a 

mutual insurance holding company 

would be treated in the same manner 

applicable to insurance companies 

under Section 203(e) of the Dodd-Frank 

Act, which provides that ‘‘if an 

insurance company is a covered 

financial company or a subsidiary or 

affiliate of a covered financial company, 

the liquidation or rehabilitation of such 

insurance company, and any subsidiary 

or affiliate of such company that is [an 

insurance company], shall be conducted 

as provided under applicable State 

law.’’ 10 This proposed treatment was 

limited to mutual insurance holding 

companies whose largest United States 

subsidiary (as measured by total assets 

as of the end of the previous calendar 

quarter) is an insurance company or an 

intermediate insurance stock holding 

company, and whose investments are 

limited to the securities of an 

intermediate insurance stock holding 

company, the securities of the converted 

mutual insurance company and other 

assets and securities of the type 

authorized for holding and investment 

by an insurance company domiciled in 

its state of incorporation. The Proposed 

Rule also provided that this treatment 

apply only to mutual insurance holding 

companies that are regulated by and are 

subject to the insurance company 

insolvency laws of their states of 

domicile, and that are not subject to 

bankruptcy proceedings. 

The public comments supported the 

Proposed Rule’s objective of treating a 

mutual insurance holding company as 

an insurance company for purposes of 

Section 203(e) of the Dodd-Frank Act.11

The comments focused on two elements 

of the Proposed Rule: The definitions of 

mutual insurance holding company and 

intermediate insurance stock holding 

company and the conditions imposed in 

order for a mutual insurance holding 

company to qualify as an insurance 

company under Section 203(e) of the 

Dodd-Frank Act. 

Most of the commenters suggested 

that the definition of mutual insurance 

holding company be modified with 

respect to the requirement that the 

mutual insurance holding company 

‘‘hold either (i) At least 51% of the 

issued and outstanding voting stock of 

the intermediate insurance stock 

holding company, if any, or (ii) if there 

is no intermediate insurance stock 

holding company, at least 51% of the 

issued and outstanding voting stock of 

the converted mutual insurance 

company.’’ Several commenters noted 

that many state laws only require the 

mutual insurance holding company to 

own a majority of the voting stock of the 

intermediate insurance stock holding 

company, if any, or, if there is no 

intermediate insurance stock holding 

company, a majority of the voting stock 

of the converted mutual insurance 

company. One commenter 

recommended substituting ‘‘a majority 

of the voting stock’’ for ‘‘51% of the 

issued and outstanding voting stock’’ 

where the phrase appears within the 

definition of mutual insurance holding 

company. Another commenter 

recommended substituting ‘‘a majority 

of the voting power in the election of 

directors’’ for ‘‘51% of the issued and 

outstanding voting stock’’ where the 

phrase appears within the definition of 

mutual insurance holding company. 


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Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Rules and Regulations 25351 

Several commenters suggested that 

the definition of intermediate insurance 

stock holding company be modified 

with respect to the requirement that the 

intermediate insurance stock holding 

company ‘‘hold all of the issued and 

outstanding voting stock of the 

converted mutual insurance company.’’ 

One commenter suggested that the word 

‘‘all’’ be changed to ‘‘a majority’’ to be 

more consistent with the requirements 

of state law. Another commenter 

suggested retaining the concept of ‘‘all 

of the issued and outstanding voting 

stock’’ but allow the ownership to be 

‘‘directly or indirectly.’’ 

One commenter suggested that the 

definition of intermediate insurance 

stock holding company be modified to 

clarify that an intermediate insurance 

stock holding company can be formed 

either at the time of or at any time after 

the conversion of the mutual insurance 

company into a stock insurance 

company. Another commenter 

suggested deleting the phrase ‘‘For 

purposes of this subpart’’ from the 

definition of intermediate insurance 

stock holding company to be consistent 

with other definitions in § 380.1. 

Several commenters suggested that 

the definition of mutual insurance 

company be modified. One commenter 

suggested that the word ‘‘association’’ 

should be changed to ‘‘corporation’’ 

because a mutual insurance company is 

a non-stock corporation and not an 

association. The same commenter 

suggested changing the words ‘‘in which 

equity and voting rights are vested in 

the policyholders’’ to ‘‘in which rights 

in surplus and membership interests are 

vested in the policyholders’’ because a 

mutual insurance company has 

‘‘surplus’’ not ‘‘equity’’ and the interests 

of the members may be broader than just 

voting rights. Another commenter 

suggested changing the words ‘‘in which 

equity and voting rights are vested in 

the policyholders’’ to ‘‘in which equity, 

voting rights and control are vested in 

the policyholders’’ to emphasize that 

‘‘policyholders actually exercise 

effective control, rather than have that 

power merely conferred by charter or 

otherwise.’’ One commenter suggested 

deleting the word ‘‘domestic’’ in the 

phrase ‘‘a domestic insurance company 

organized under the laws of a State’’ 

because it was redundant. 

With respect to the conditions that 

must exist for a mutual insurance 

holding company to be treated as an 

insurance company for the purpose of 

Section 203(e) of the Dodd-Frank Act as 

set forth in § 380.11, several 

commenters suggested modifying one or 

more of the conditions. One commenter 

suggested removing the condition that 

the company is not subject to 

bankruptcy proceedings under Title 11 

of the United States Code, i.e., the U.S. 

Bankruptcy Code. The commenter noted 

that the issue of whether a mutual 

insurance holding company is excluded 

from coverage under the U.S. 

Bankruptcy Code is unsettled. Thus, in 

the commenter’s view, imposing the 

condition in § 380.11 introduced 

uncertainty about whether a mutual 

insurance holding company would be 

treated as an insurance company for the 

purpose of Section 203(e) of the DoddFrank Act. 

Several commenters suggested 

modifying the requirement in § 380.11 

that the mutual insurance holding 

company limit its assets and 

investments to the securities of an 

intermediate insurance stock holding 

company, the securities of the converted 

mutual insurance company ‘‘and other 

assets and securities of the type 

authorized for holding and investment 

by an insurance company domiciled in 

its state of incorporation.’’ The 

commenters noted that the requirement 

is not mandated by state law although 

some states do limit a mutual insurance 

holding company’s investment in noninsurance assets. One of those 

commenters suggested that the mutual 

insurance holding company be allowed 

to make any investment ‘‘permitted 

under applicable State law.’’ 

The FDIC has carefully considered the 

comments and made appropriate 

revisions to the Final Rule as described 

below. 

III. Description of Final Rule 

A. Overview 

The Final Rule modifies Part 380 of 

Title 12 of the Code of Federal 

Regulations, and provides generally that 

a mutual insurance holding company 

that meets the requirements of the Final 

Rule will be treated as an insurance 

company for the purpose of Section 

203(e) of the Dodd-Frank Act. 

B. Section-by-Section Analysis of the 

Final Rule 

The Final Rule adds three definitions 

to Section 380.1 of Title 12 of the Code 

of Federal Regulations: Intermediate 

insurance stock holding company; 

mutual insurance company; and mutual 

insurance holding company. The 

definition of mutual insurance holding 

company has been modified in the Final 

Rule to provide that the company could 

own a ‘‘majority’’ of the stock of the 

intermediate insurance stock holding 

company and the converted mutual 

insurance company instead of the 

specific threshold of ‘‘at least 51%’’ 

included in the Proposed Rule. The 

definition of the intermediate insurance 

stock holding company was also 

modified in the Final Rule to delete an 

unnecessary introductory phrase ‘‘For 

purposes of this subpart’’ and to 

indicate that such company could be 

organized either at the time of or after 

the organization of the mutual insurance 

holding company and could hold ‘‘a 

majority’’ rather than ‘‘all’’ of the stock 

of the converted mutual insurance 

company. In addition, the definition of 

the mutual insurance company was 

amended to reflect that it is organized 

as a non-stock mutual corporation, not 

an association, and that its 

policyholders hold the surplus, not 

‘‘equity’’ in this company. The Final 

Rule does not include any additional 

changes suggested by the public 

comments to permit the mutual 

insurance holding company to hold the 

voting stock of the intermediate 

insurance stock holding company 

directly or indirectly or to permit the 

intermediate insurance stock holding 

company to hold the voting stock of the 

converted mutual insurance company 

directly or indirectly. These changes 

appear inconsistent with the existing 

mutual insurance holding company 

structure. Likewise, the Final Rule does 

not remove the term ‘‘voting rights’’ and 

substitute the term ‘‘membership 

interests’’ since voting rights remain 

essential to defining the control of the 

mutual insurance company and the 

intermediate insurance stock holding 

company. 

The Final Rule adds Section 380.11 to 

provide that a mutual insurance holding 

company shall be treated as an 

insurance company for the purpose of 

Section 203(e) of the Dodd-Frank Act, 

12 U.S.C. 5383(e); provided that: (a) It 

is subject to the insurance laws of the 

state of its domicile, including 

specifically and without limitation, a 

statutory regime for the rehabilitation or 

liquidation of insurance companies that 

are in default or in danger of default; (b) 

it is not subject to bankruptcy 

proceedings under Title 11 of the 

United States Code; (c) its largest United 

States subsidiary (as measured by total 

assets as of the end of the previous 

calendar quarter) is an insurance 

company or an intermediate insurance 

stock holding company; and (d) its 

investments are limited to the securities 

of an intermediate insurance stock 

holding company, the securities of the 

converted mutual insurance company 

and other assets and securities of the 

type authorized for holding and 

investment by an insurance company 

domiciled in its state of incorporation. 


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25352 Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Rules and Regulations 

12The investments of the intermediate insurance 

stock holding company, however, are not restricted 

in this manner because, under the Final Rule, the 

intermediate insurance stock holding company is 

not treated as an insurance company for the 

purpose of Section 203(e) of the Dodd-Frank Act. 

13See 5 U.S.C. 603, 604 and 605. 

14 13 CFR 121.201. 

The first proviso requires that the 

mutual insurance holding company be 

subject to the insurance laws of the state 

of its domicile, including specifically 

and without limitation, a statutory 

regime for the rehabilitation or 

liquidation of insurance companies that 

are in default or in danger of default and 

is included in the Final Rule to be 

consistent with two of the three prongs 

of the definition of ‘‘insurance 

company’’ set forth in Section 201(a)(13) 

of the Dodd-Frank Act. The reference to 

companies that are ‘‘in default or in 

danger of default’’ ensures that the state 

resolution process will be applicable in 

a time and manner comparable to the 

Title II orderly liquidation process, 

which applies to financial companies 

that are in default or in danger of default 

under Section 203(b)(1) of the DoddFrank Act. 

The second proviso requires that the 

mutual insurance holding company is 

not subject to bankruptcy proceedings 

under Title 11 of the United States Code 

and is included to make clear that the 

mutual insurance holding company 

must not only be subject to the 

applicable state insurance law but must 

also be resolved under the applicable 

state insurance law. Thus, the Final 

Rule does not delete this requirement as 

some public comments suggested, but 

rather retains it to ensure that there is 

no ambiguity or conflict with respect to 

the determination of which insolvency 

regime is applicable to a mutual 

insurance holding company. To the 

extent that any such ambiguity or 

conflict exists, it is the intent of the 

Final Rule that the ambiguity be 

resolved in favor of allowing resolution 

under Title II of the Dodd-Frank Act 

even if the mutual insurance holding 

company may be an eligible debtor 

under Title 11 of the United States 

Code. 

The third proviso, which requires that 

the mutual insurance holding 

company’s largest United States 

subsidiary (as measured by total assets 

as of the end of the previous calendar 

quarter) is an insurance company or an 

intermediate insurance stock holding 

company, is included to ensure that, if 

a mutual insurance holding company 

covered by the Final Rule is placed in 

orderly liquidation under Title II of the 

Dodd-Frank Act, the Director of the 

Federal Insurance Office would 

participate in making the 

recommendation to take such action in 

accordance with the provisions of 

Section 203(a)(1)(C) of the Dodd-Frank 

Act. In addition, this requirement is 

intended to make clear that an 

insurance company subsidiary of the 

mutual insurance holding company 

must be its most significant subsidiary 

by asset size. 

The final proviso requires the mutual 

insurance holding company to limit its 

investments to the securities of the 

intermediate insurance stock holding 

company, the securities of the converted 

mutual insurance company and other 

assets and securities of the type 

authorized for holding and investment 

by an insurance company domiciled in 

its state of incorporation. The FDIC 

rejected a public comment to alter these 

investment requirements because the 

FDIC believes that this proviso ensures 

that the mutual insurance holding 

company is operating purely as a 

holding company and is not itself 

actively engaged in operating noninsurance businesses.12

IV. Regulatory Analysis and Procedure 

A. Paperwork Reduction Act 

In accordance with the Paperwork 

Reduction Act (44 U.S.C. 3501 et seq.) 

(‘‘PRA’’), the FDIC may not conduct or 

sponsor, and a person is not required to 

respond to, a collection of information 

unless it displays a currently valid 

Office of Management and Budget 

(OMB) control number. The Final Rule 

would not involve any new collections 

of information pursuant to the 

Paperwork Reduction Act (44 U.S.C. 

3501 et seq.). Consequently, no 

information will be submitted to the 

Office of Management and Budget for 

review. 

B. Regulatory Flexibility Act 

The Regulatory Flexibility Act 5 

U.S.C. 601 et seq. (RFA) requires each 

federal agency to prepare a final 

regulatory flexibility analysis in 

connection with the promulgation of a 

final rule, or certify that the final rule 

will not have a significant economic 

impact on a substantial number of small 

entities.13 Pursuant to Section 605(b) of 

the Regulatory Flexibility Act, the FDIC 

certifies that the Final Rule will not 

have a significant economic impact on 

a substantial number of small entities. 

Under regulations issued by the Small 

Business Administration (‘‘SBA’’), a 

‘‘small entity’’ includes those firms 

within the ‘‘Finance and Insurance’’ 

sector with asset sizes that vary from $7 

million or less in assets to $175 million 

or less in assets.14 The Final Rule 

clarifies that a mutual insurance holding 

company that is a covered financial 

company will be treated as an insurance 

company for the purpose of Section 

203(e) of the Dodd-Frank Act. The Final 

Rule provides internal guidance to FDIC 

personnel in such an event and will 

address an uncertainty in the financial 

system as to how such a company 

would be treated for purposes of Section 

203(e) of the Dodd-Frank Act. For a 

mutual insurance holding company to 

be determined to be a covered financial 

company under Section 203(b) of the 

Dodd-Frank Act, its failure must have 

serious adverse effects on the financial 

stability of the United States. The Final 

Rule would apply to a mutual insurance 

holding company regardless of such 

company’s size. Although the asset size 

of a company may not be the 

determinative factor of whether such 

company may pose a systemic risk to 

the financial stability of the United 

States, it is an important consideration. 

It is unlikely that the failure of a mutual 

insurance holding company that is at or 

below the $175 million asset threshold, 

or the nature, scope, size, scale, 

concentration, interconnectedness, or 

mix of its activities, would pose a threat 

to the financial stability of the United 

States. As such, the Final Rule will not 

have a significant economic impact on 

small entities. 

C. Small Business Regulatory 

Enforcement Fairness Act 

The Office of Management and Budget 

has determined that the Final Rule is 

not a ‘‘major rule’’ within the meaning 

of the Small Business Regulatory 

Enforcement Fairness Act of 1996 

(‘‘SBREFA’’) (5 U.S.C. 801 et seq.). As 

required by SBREFA, the FDIC will file 

the appropriate reports with Congress 

and the General Accounting Office so 

that the Final Rule may be reviewed. 

D. The Treasury and General 

Government Appropriations Act, 1999— 

Assessment of Federal Regulations and 

Policies on Families 

The FDIC has determined that the 

Final Rule will not affect family wellbeing within the meaning of Section 654 

of the Treasury and General 

Government Appropriations Act, 

enacted as part of the Omnibus 

Consolidated and Emergency 

Supplemental Appropriations Act of 

1999 (Pub. L. 105–277, 112 Stat. 2681). 

E. Plain Language 

Section 722 of the Gramm-LeachBliley Act (Pub. L. 106–102, 113 Stat. 

1338, 1471), requires the Federal 

banking agencies to use plain language 

in all proposed and final rules 

published after January 1, 2000. The 


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Federal Register / Vol. 77, No. 83 / Monday, April 30, 2012 / Rules and Regulations 25353 

FDIC has sought to present the Final 

Rule in a simple and straightforward 

manner. 

List of Subjects in 12 CFR Part 380 

Holding companies, Insurance 

companies, Mutual insurance holding 

companies. 

For the reasons stated above, the 

Board of Directors of the Federal 

Deposit Insurance Corporation amends 

part 380 of title 12 of the Code of 

Federal Regulations as follows: 

PART 380—ORDERLY LIQUIDATION 

AUTHORITY 

■ 1. The authority citation for part 380 

is revised to read as follows: 

Authority: 12 U.S.C. 5383(e); 12 U.S.C. 

5389; 12 U.S.C. 5390(s)(3); 12 U.S.C. 

5390(b)(1)(C); 12 U.S.C. 5390(a)(7)(D). 

■ 2. The heading for subpart A is 

revised to read as follows: 

Subpart A—General and Miscellaneous 

Provisions 

■ 3. Amend § 380.1 by adding 

definitions of Intermediate insurance 

stock holding company, Mutual 

insurance company, and Mutual 

insurance holding company in 

alphabetical order to read as follows: 

§ 380.1 Definitions. 

* * * * * 

Intermediate insurance stock holding 

company. The term ‘‘intermediate 

insurance stock holding company’’ 

means a corporation organized either at 

the time of, or at any time after, the 

organization of the mutual insurance 

holding company that: 

(1) Is a subsidiary of a mutual 

insurance holding company; 

(2) Holds a majority of the issued and 

outstanding voting stock of the 

converted mutual insurance company 

created at the time of formation of the 

mutual insurance holding company; and 

(3) Holds, as its largest United States 

subsidiary (as measured by total assets 

as of the end of the previous calendar 

quarter), an insurance company. 

Mutual insurance company. The term 

‘‘mutual insurance company’’ means an 

insurance company organized under the 

laws of a State that provides for the 

formation of such an entity as a nonstock mutual corporation in which the 

surplus and voting rights are vested in 

the policyholders. 

Mutual insurance holding company. 

The term ‘‘mutual insurance holding 

company’’ means a corporation that: 

(1) Is lawfully organized under state 

law authorizing its formation in 

connection with the reorganization of a 

mutual insurance company that 

converts the mutual insurance company 

to a stock insurance company, and— 

(2) Holds either: 

(i) A majority of the issued and 

outstanding voting stock of the 

intermediate insurance stock holding 

company, if any, or 

(ii) If there is no intermediate 

insurance stock holding company, a 

majority of the issued and outstanding 

voting stock of the converted mutual 

insurance company. 

* * * * * 

■ 4. Add § 380.11 to read as follows: 

§ 380.11 Treatment of mutual insurance 

holding companies. 

A mutual insurance holding company 

shall be treated as an insurance 

company for the purpose of section 

203(e) of the Dodd-Frank Act, 12 U.S.C. 

5383(e); provided that— 

(a) The company is subject to the 

insurance laws of the state of its 

domicile, including, specifically and 

without limitation, a statutory regime 

for the rehabilitation or liquidation of 

insurance companies that are in default 

or in danger of default; 

(b) The company is not subject to 

bankruptcy proceedings under Title 11 

of the United States Code; 

(c) The largest United States 

subsidiary of the company (as measured 

by total assets as of the end of the 

previous calendar quarter) is an 

insurance company or an intermediate 

insurance stock holding company; and 

(d) The assets and investments of the 

company are limited to the securities of 

an intermediate insurance stock holding 

company, the securities of the converted 

mutual insurance company and other 

assets and securities of the type 

authorized for holding and investment 

by an insurance company domiciled in 

its state of incorporation. 

Dated at Washington, DC, this 23rd day of 

April 2012. 

By order of the Board of Directors. 

Federal Deposit Insurance Corporation. 

Robert E. Feldman, 

Executive Secretary. 

[FR Doc. 2012–10146 Filed 4–27–12; 8:45 am] 

BILLING CODE 6714–01–P 

DEPARTMENT OF HEALTH AND 

HUMAN SERVICES 

Food and Drug Administration 

21 CFR Parts 16, 312, 511, and 812 

[Docket No. FDA–2011–N–0079] 

RIN 0910–AG49 

Disqualification of a Clinical 

Investigator 

AGENCY: Food and Drug Administration, 

HHS. 

ACTION: Final rule. 

SUMMARY: The Food and Drug 

Administration (FDA) is amending the 

regulations to expand the scope of 

clinical investigator disqualification. 

Under this rulemaking, when the 

Commissioner of Food and Drugs (the 

Commissioner) determines that an 

investigator is ineligible to receive one 

kind of test article (drugs, devices or 

new animal drugs), the investigator also 

will be ineligible to conduct any clinical 

investigation that supports an 

application for a research or marketing 

permit for other kinds of products 

regulated by FDA. This final rule is 

based in part upon recommendations 

from the Government Accountability 

Office (GAO), and is intended to help 

ensure adequate protection of research 

subjects and the quality and integrity of 

data submitted to FDA. FDA also is 

amending the list of regulatory 

provisions under which an informal 

regulatory hearing is available by 

changing the scope of certain provisions 

and adding regulatory provisions that 

were inadvertently omitted. 

DATES: This rule is effective May 30, 

2012. 

FOR FURTHER INFORMATION CONTACT: 

Kathleen E. Pfaender, Office of Good 

Clinical Practice, Food and Drug 

Administration, 10903 New Hampshire 

Ave., Bldg. 32, Rm. 5129, Silver Spring, 

MD 20993, 301–796–8340. 

SUPPLEMENTARY INFORMATION: 

I. Background 

In the Federal Register of April 13, 

2011 (76 FR 20575), FDA proposed to 

amend its regulations to expand the 

scope of clinical investigator 

disqualification (the April 2011 

proposed rule). As discussed in greater 

detail in the preamble to the proposed 

rule (76 FR 20575 at 20576 to 20585), 

when disqualified by a Commissioner’s 

decision under one part of the former 

regulations a clinical investigator 

continued to be eligible to receive other 

types of test articles and conduct 


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