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house Bill H.R. 1478

Protecting Insurance Policyholders When Affiliated Bank Holding Companies Fail

Argument in favor

People shouldn’t have to worry about losing value on their insurance policies when a bank holding company that includes their insurance provider becomes insolvent. State regulators can effectively protect policyholders in those situations.

Alis's Opinion
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11/16/2015
Good grief. We didn't fix this in 2008? Idiot members of Congress!! You are so stupid & selfish!! Shame on you!
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FatLenny's Opinion
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11/17/2015
Enhanced communication between two industries regulated differently in order to protect consumers is sound logic. State insurance regulators should be monitoring the solvency of insurers, and this allows better communication in the event that an unforeseen circumstance arises outside of their jurisdiction.
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Burnetta's Opinion
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05/15/2016
The peoples monies MUST be protected. It's not their fault that the banks failed to do their job. screwing the people out of what is theirs must be stopped. They are relaying on this money that they worked hard for and should not be screwed out of it. Just my opinion
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Argument opposed

If an insurance company is affiliated with an insolvent bank holding company, that holding company needs to use whatever funds it can find to stabilize itself — even if it diminishes the value of people’s policies.

GrumpyMSgt's Opinion
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11/17/2015
Existing laws say insurance companies must have cash on hand to pay all polices in force. Any assets above those they can play with as they wish. State insurance divisions normally enforce these requirements before allowing a company to do business in their state.
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operaman's Opinion
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11/17/2015
If this happens, it's the states fault. The should cover the policy based on their failure to monitor the Insurance Company. Stock holders must also pay the price in making a poor investment.
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Paul's Opinion
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11/17/2015
You should get your insurance from a company that does not include a component that makes risky gambles. Reinstate Glass-Stiegel.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
      senate Committees
      Committee on Banking, Housing, and Urban Affairs
  • The house Passed November 17th, 2015
    Passed by Voice Vote
      house Committees
      Committee on Financial Services
    IntroducedMarch 19th, 2015

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What is House Bill H.R. 1478?

This bill clarifies that state insurance regulators are authorized to wall-off insurance companies that are affiliated with bank holding companies from being held financially responsible for an affiliated bank’s failure under financial stress and is required to support the holding company.

The FDIC would be authorized to place financially insolvent bank holding companies under the state’s jurisdiction if a state regulatory agency hasn’t stepped in, to ensure that state agencies can intervene to protect insurance policyholders.

Before placing a lien on a bank holding company’s assets, the FDIC would be required to inform the state insurance authority promptly of their intentions. If the state insurance regulators notify them that doing so would have a materially adverse effect on the insurance company’s policyholders.

Under current law, there is a possibility that state insurance regulators would be kept from participating in the orderly liquidation of a bank by the Federal Deposit Insurance Corporation (FDIC) to ensure that insurance policyholders are protected.

Impact

Insurance policyholders, bank holding companies that own insurance companies, state insurance regulators, and the FDIC.

Cost of House Bill H.R. 1478

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Rep. Bill Posey (R-FL) introduced this legislation to protect insurance consumers to lose value on their insurance policies simply because the insurance company is affiliated with a failing bank:

“It’s simply wrong to force average middle-class families to put their homeowner’s or life insurance policies at risk because some Wall Street firm made a bad bet.”

This bill was necessitated by unclear provisions within the Dodd-Frank Act, and creates an additional pathway for the FDIC to step in and assist state insurance regulators.

The House Financial Services Committee unanimously passed this legislation by a vote of 57-0, and this bill has 35 cosponsors in the House — including four Democrats and 31 Republicans.


Media:

Summary by Eric Revell
(Photo Credit: "NY stock exchange traders floor LC-U9-10548-6" by Thomas J. O'Halloran, photographer - Floor of the New York Stock ExchangeThis image is available from the United States Library of Congress's Prints and Photographs division under the digital ID ppmsca.03199.This tag does not indicate the copyright status of the attached work. A normal copyright tag is still required. See Commons:Licensing for more information.العربية | čeština | Deutsch | English | español | فارسی | suomi | français | magyar | italiano | македонски | മലയാളം | Nederlands | polski | português | русский | slovenčina | slovenščina | Türkçe | українська | 中文 | 中文(简体)‎ | 中文(繁體)‎ | +/−. Licensed under Public Domain via Commons - https://commons.wikimedia.org/wiki/File:NY_stock_exchange_traders_floor_LC-U9-10548-6.jpg#/media/File:NY_stock_exchange_traders_floor_LC-U9-10548-6.jpg)

AKA

Policyholder Protection Act of 2015

Official Title

To provide for notice to, and input by, State insurance commissioners when requiring an insurance company to serve as a source of financial strength or when the Federal Deposit Insurance Corporation places a lien against an insurance company's assets, and for other purposes.

    Existing laws say insurance companies must have cash on hand to pay all polices in force. Any assets above those they can play with as they wish. State insurance divisions normally enforce these requirements before allowing a company to do business in their state.
    Like (4)
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    Good grief. We didn't fix this in 2008? Idiot members of Congress!! You are so stupid & selfish!! Shame on you!
    Like (2)
    Follow
    Share
    If this happens, it's the states fault. The should cover the policy based on their failure to monitor the Insurance Company. Stock holders must also pay the price in making a poor investment.
    Like (1)
    Follow
    Share
    Enhanced communication between two industries regulated differently in order to protect consumers is sound logic. State insurance regulators should be monitoring the solvency of insurers, and this allows better communication in the event that an unforeseen circumstance arises outside of their jurisdiction.
    Like (1)
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    Insolvency of a bank that owns an insurance policy isn't something the policy holder should have to worry about. The company's business is providing insurance, the policy holder paid for it. Grant them their policy, maybe provide means to get another policy.
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    Laws should be made to make an insurance company bond itself to have the funds available to pay out on it's claims. It should not matter where they invest the funds as long as they have sufficient funds to pay claimants.
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    But not through means of robbing 401K retirement savings.
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    Nice to see something that protects the little guy. I think this might make businesses more careful will conducting business.
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    Sounds like another bailout to me.
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    Should ban bank holding companies from even owning insurance companies or vis versa
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    Let's not have another stock Market crash. It's going to hurt the economy
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    I guess we could always reinstate Glass-Stiegel
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    It is not the governments job, nor the taxpayers responsibility to safeguard a private entity. They must be allowed to succeed or fail of there own free will of good or bad choices.
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    Better yet - repeal Dodd Frank
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    We have FDIC to protect money in the bank up to $250,000 but nothing to protect against insurance company is going out of business. The spring 2016 and the middle class has been virtually eliminated, We cannot afford as a country to destroy the savings of millions more Americans.
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    Don't punish the policy holders, but definitely include provisions to hold company management accountable.
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    The government needs to stop meddling with the free market.
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    Banks should not have more protection than people. The end.
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    You should get your insurance from a company that does not include a component that makes risky gambles. Reinstate Glass-Stiegel.
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    Of course. We've got too many safety nets for banks and insurance companies. How about honoring the individual Americans who've spent their hard earned money on insurance? If someone has to get screwed, it shouldn't be them. The heads of banks and insurance companies will be fine if faced with bankruptcy. The average citizen would be devastated. If the policy holders failed to meet their obligations conservatives would have them thrown in debtors' prison to rot. The well being of "The People" should be the end goal of any legislation. This is a big one, worth getting involved.
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