II 113th CONGRESS 1st Session S. 1369 IN THE SENATE OF THE UNITED STATES July 25, 2013 Mr. Brown (for himself, Mr. Johanns , Mr. Kirk , Mr. Tester , and Mr. Toomey ) introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs A BILL To provide additional flexibility to the Board of Governors of the Federal Reserve System to establish capital standards that are properly tailored to the unique characteristics of the business of insurance, and for other purposes.

1. Findings and Purpose (a) Findings Congress finds that— (1) insurance companies are regulated by the State insurance authorities of the States in which the insurance companies are domiciled or licensed to sell insurance; (2) as exemplified by section 5 of the Bank Holding Company Act of 1956 ( 12 U.S.C. 1844 ), Congress has long recognized and sought to preserve the State-based insurance regime; (3) Senate Report 111–176, relating to the Restoring American Financial Stability Act of 2010 (S. 3217), directed Federal banking agencies to consider the existing regulatory requirements, accounting treatment, and unique capital structures of insurance companies in developing capital requirements for insurance entities; and (4) while section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5371) directs Federal banking agencies to establish minimum risk-based capital and leverage standards on a consolidated basis, Congress did not intend for Federal banking regulators to discard the State risk-based capital system in favor of a banking capital regime. (b) Purpose The purpose of this Act is to provide additional flexibility for the Board of Governors of the Federal Reserve System to establish capital standards that are properly tailored to the unique characteristics of the business of insurance. 2. Exclusion of insurers from bank capital rules Section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5371 ) is amended— (1) in subsection (a), by adding at the end the following: (4) Business of insurance The term business of insurance has the same meaning as in section 1002. (5) Primarily engaged in the business of insurance A company is primarily engaged in the business of insurance if— (A) the annual gross revenues derived by the company and all subsidiaries of the company from the business of insurance represent not less than 2/3 of the consolidated annual gross revenues of the company; or (B) the consolidated assets of the company and all subsidiaries of the company that relate to the business of insurance represent not less than 2/3 of the consolidated assets of the company. ; and (2) in subsection (b)(5)— (A) in subparagraph (B), by striking or ; (B) in subparagraph (C), by striking the period at the end and inserting a semicolon; and (C) by adding at the end the following: (D) any depository institution holding company that— (i) is primarily engaged in the business of insurance; or (ii) is an insurance underwriting company at the holding company level and was in existence on July 21, 2010; or (E) any nonbank financial company supervised by the Board of Governors that, together with its subsidiaries, is primarily engaged in the business of insurance. .