Effective Date Set for New FRB Framework for Supervision of Insurance Activities

The effective date for the Federal Reserve Board's ("FRB") new framework for the supervision of insurance activities engaged in by depository institution holding companies will be November 3, 2022. The notice was published in the Federal Register.

As previously covered, the new framework described the FRB's approach to the supervision of insurance organizations, focusing on the risks that differentiate these organizations from traditional banking entities. It detailed the material risks that could pose a threat to the safety of business operations, and explained the new supervisory rating system that will be used to determine an institution's risk exposure. The FRB said that the framework applies to depository institution holding companies that (i) are insurance underwriting companies or (ii) have over 25 percent of their consolidated assets held by insurance underwriting subsidiaries.