U.S. Representative

Dennis A. Ross

Proudly Serving Florida's 15th Congressional District

In the News


House Republicans Decry Double Standard For Insurers, Asset Managers Under FSOC

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WASHINGTON, September 3, 2014 | comments

Republican lawmakers accused the Financial Stability Oversight Council Sept. 2 of holding insurers and asset managers to different standards in its deliberations over whether to designate certain companies as systemically important financial institutions.

“We are concerned that the council has devoted far less effort to empirical analysis, stakeholder outreach, and transparency in its consideration of insurance companies for designation than it has for asset management firms,” seven House Republicans said in aletter to Treasury Secretary and FSOC head Jacob Lew.

The letter was signed by Republican Reps. Scott Garrett (N.J.), Spencer Bachus (Ala.), Ed Royce (Calif.), Steve Stivers (Ohio), Sean Duffy (Wis.), Mick Mulvaney (S.C.) and Dennis Ross (Fla.), all members of the House Financial Services Committee.

The FSOC is in the final stages in deciding whether to designate insurer MetLife Inc. as a SIFI and is also deliberating a potential designation for asset managers BlackRock Inc. and Fidelity Investments.


The lawmakers urged the council to approach the insurance industry with the same scrutiny it applied to asset managers.

On May 19, the FSOC had a public conference to hear from representatives of the asset management industry about the consequences of SIFI designations.

In late July, the council said it was undertaking a “more focused analysis” of the asset management industry

“It is incumbent on the council to conduct a thorough public examination of each nonbank financial sector where companies are under consideration before moving forward with additional designations,” the letter said.

Office of Financial Research

The lawmakers also said there should be a published analysis of the insurance industry, akin to a September 2013 report from the Treasury Department's Office of Financial Research on asset managers.

That report, however, was panned by lawmakers, many of whom viewed it as overreaching by the Treasury Department into the Securities and Exchange Commission's oversight areas.

“While the report was widely and rightfully criticized for its faulty information and dubious conclusions, it was at least an attempt at conducting a thoughtful analysis of an industry and its practices before rushing to designate specific firms as SIFIs,” the letter said. “Unfortunately, rather than learning from its mistakes and conducting a more rigorous analysis next time, the council has apparently decided not to publish an analysis of the insurance industry at all.”

The letter also asked the OFR to heed a February report from its own advisory subcommittee to “conduct a detailed study” of the systemic risks posed by the insurance industry and how they are handled under current regulations.

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