I 113th CONGRESS 1st Session H. R. 2140 IN THE HOUSE OF REPRESENTATIVES May 23, 2013 Mr. Gary G. Miller of California (for himself and Mrs. McCarthy of New York ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To permit insurance companies that are depository holding companies, or are subsidiaries of depository holding companies, to comply with the accounting and capital requirements applicable to the insurance company under State law, and for other purposes.

1. Short title This Act may be cited as the Insurance Capital and Accounting Standards Act of 2013 . 2. Leverage and risk-based capital requirements Subsection (b) of section 171 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5371(b) ) is amended— (1) by redesignating paragraphs (3), (4), (5), (6), and (7) as paragraphs (4), (5), (6), (7), and (8), respectively; and (2) by inserting after paragraph (2) the following new paragraph: (3) Insurance companies (A) In general The minimum leverage capital requirements and the minimum risk-based capital requirements established under paragraphs (1) and (2) shall, for depository institution holding companies and nonbank financial companies supervised by the Board of Governors that is an insurance company, or that has one or more subsidiaries that are insurance companies— (i) with respect to the insurance company, adhere to the regulatory accounting practices and procedures applicable to, and the capital structure of, such companies; and (ii) with respect to the insurance company, utilize the governing State law capital requirements for insurance companies. (B) Compliance with capital requirements under State law (i) Presumption Any insurance company, insurance affiliate, or insurance subsidiary in compliance with applicable risk-based capital standards established under State law shall be presumed to satisfy any minimum capital requirements of this section. (ii) Determination of Board with respect to presumption The Board of Governors may, on a case-by-case basis on the record, determine that the presumption in clause (i) should not apply, provided that the Board first establishes through rulemaking the general procedures and standards to be utilized for such proceedings. (iii) Effect of determination Where the Board of Governors makes a determination under clause (ii) that the presumption should not apply to a company, the requirements of subparagraphs (A), (C), and (D) remain applicable in establishing capital rules for such company. (C) Analysis of leverage and risk based capital requirements No requirements under paragraph (1) and (2) for a company described under subparagraph (A) shall apply unless the Board— (i) carries out a cost-benefit analysis of the application of those requirements specific to a company described under subparagraph (A), including soliciting and reviewing public comment of the analysis prior to any final rulemaking, and the Board of Governors determines that the benefits of applying the requirements outweigh the cost; and (ii) carries out a quantitative impact study of the application of those requirements specific to a company described under subparagraph (A), including soliciting and reviewing public comment of the study prior to any final rulemaking, and only apply the requirements if the Board of Governors determines that the study shows the requirements are appropriate. (D) Rulemaking requirements Any rulemaking implementing paragraphs (1) and (2) shall separately incorporate and reflect the requirements provided for under subparagraphs (A), (B), and (C). . 3. Accounting standards applicable to insurance companies Section 115 of the Dodd-Frank Wall Street Reform and Consumer Protection Act ( 12 U.S.C. 5325 ) is amended by adding at the end the following: (h) Accounting standards applicable to insurance companies With respect to a nonbank financial company supervised by the Board of Governors that is an insurance company, the Board of Governors may not require the insurance company to comply with accounting standards, including generally accepted accounting principles, that are different than those regulatory accounting standards applicable to the insurance company under applicable State law. . 4. Solvency, capital, and accounting requirements for insurance-based savings and loan holding companies Section 10(g) of the Home Owners’ Loan Act ( 12 U.S.C. 1467a(g) ) is amended by adding at the end the following: (6) Solvency, capital, and accounting requirements for insurance-based savings and loan holding companies (A) In general Notwithstanding any other provision of this section, in establishing capital standards required for a savings and loan holding company that is an insurance company or that has one or more subsidiaries that are insurance companies, the Board shall— (i) with respect to the insurance company, adhere to the regulatory accounting practices and procedures applicable to, and the capital structure of, such company; (ii) with respect to the insurance company, utilize the governing State law capital requirements for insurers; and (iii) not require any insurance company to comply with accounting standards, including generally accepted accounting principles, that are different than those accounting standards the company is required to comply with by the company’s State regulator. (B) Compliance with capital requirements under State law (i) Presumption Any insurance company, insurance affiliate, or insurance subsidiary in compliance with applicable risk-based capital standards established under State law shall be presumed to satisfy any capital requirements of this Act. (ii) Determination of Board with respect to presumption The Board may, on a case-by-case basis on the record, determine that the presumption in clause (i) should not apply, provided that the Board first establishes through rulemaking the general procedures and standards to be utilized for such proceedings. (iii) Effect of determination Where the Board makes a determination under clause (ii) that the presumption should not apply to a company, the requirements of subparagraphs (A), (C), and (D) remain applicable in establishing capital rules for such company. (C) Analysis of capital requirements No capital requirements under this Act for a company described under subparagraph (A) shall apply unless the Board— (i) carries out a cost-benefit analysis of the application of those requirements specific to a company described under subparagraph (A), including soliciting and reviewing public comment of the analysis prior to any final rulemaking, and the Board determines that the benefits of applying the requirements outweigh the cost; and (ii) carries out a quantitative impact study of the application of those requirements specific to a company described under subparagraph (A), including soliciting and reviewing public comment of the study prior to any final rulemaking, and only apply the requirements if the Board determines that the study shows the requirements are appropriate. (D) Rulemaking requirements Any rulemaking setting capital rules for companies described in subparagraph (A) shall separately incorporate and reflect the requirements provided for under subparagraphs (A), (B), and (C). . 5. Source of strength Section 38A of the Federal Deposit Insurance Act ( 12 U.S.C. 1831o–1 ) is amended— (1) by redesignating subsections (c), (d), and (e) as subsections (d), (e), and (f), respectively; and (2) by inserting after subsection (b) the following: (c) Insurance regulator consent In cases involving a depository institution holding company that is an insurance company or that has one or more subsidiaries that are insurance companies, before the appropriate Federal banking agency may require such insurance company to be used directly or indirectly as a source of financial strength pursuant to subsection (a) or (b), the appropriate Federal banking agency shall obtain— (1) the consent of the insurance commissioner (or similar official charged with the principal responsibility of supervising the business of insurance within each State, territory, or insular possession of the United States) of the insurance company’s domiciliary State; and (2) a certification from such commissioner that the commissioner considered the safety and soundness of the insurance company or subsidiary insurance company prior to providing such consent. .