FRB Capital Rule for Insurance Depository Holding Companies Coming Soon

In a speech at the National Association of Insurance Commissioners International Insurance Forum, Federal Reserve Board ("FRB") Vice Chair of Supervision Randal Quarles reported that the FRB will publish soon a capital rule for insurance depository institution holding companies. As previously discussed, the proposed rule utilizes a framework known as the "Building Block Approach" (or "BBA"), and "adjusts and aggregates existing legal-entity capital requirements to produce an enterprise-wide capital requirement" for entities with both banking and insurance operations. He explained that "the BBA uses the existing and time-tested frameworks that have been tailored specifically to measure appropriately particular risks. It assesses insurance risks using an insurance capital framework and banking risks using our banking capital framework."