Federal Reserve requests information from the insurance industry

industry insurance fraud

Federal agency is asking insurers to provide more data concerning postcrisis capital rules

The U.S. Federal Reserve has begun reaching out to the insurance industry in order to obtain more data concerning postcrisis capital rules that could have a major impact on insurance companies. The agency has sent a request for information to 20 insurers. Companies that have received a request for information are considered to be “systematically important” to the country’s overall economy. Companies like American International Group and Prudential Financial Inc. fall within this designation.

Data provided by insurance companies could help the agency develop better rules

Data provided by the insurance industry will be used to help the Federal Reserve make changes to the rules that govern certain, essential organizations within the insurance space. Companies that the agency considers to be systematically important are held to higher standards than their counterparts. These companies must adhere to stricter capital and liquidity rules and comply with various other regulations. The agency is looking for ways to make changes to the regulations in the near future.

Agency hopes to see significant changes to federal capital laws in the coming years and data from insurers could help

industry insurance fraudThe Federal Reserve is looking to develop new capital rules that account for the differences that exist between insurance companies. Changing these rules will prove difficult, however, even if insurance companies are willing to share information with the government. Federal law restricts the Federal Reserve’s ability to adjust its capital rules beyond a certain point. This cannot be changed without making amendments to federal law.

Data from insurers could help bring reforms to federal laws

The information that the Federal Reserve is looking to obtain is expected to be used by the agency to better understand how to design a working capital framework for the insurance industry. This information could also go a long way in promoting changes to existing federal law. Agency officials have been advocating for changes to federal law for some time, but the changes that the agency wants to see are not necessarily popular among federal lawmakers.

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