The Federal Reserve is bringing on an insurance expert to help it navigate its new oversight of large insurance companies.
The central bank has hired Thomas Sullivan, who served as Connecticut’s insurance commissioner during the financial crisis, to a senior adviser role, according to The Wall Street Journal.
{mosads}In his new job, Sullivan will be playing a lead role in overseeing the establishment of capital standards for insurance companies, and will also serve as the Fed’s voice with other regulators across the globe on the industry.
The Fed, primarily known as a bank regulator, was given power to oversee the biggest players in the insurance industry and other large nonbank firms critical to the financial system.
Insurers have pushed to receive different consideration when it comes to capital rules, arguing that existing bank capital rules would not be the right fit for their business.
That difference has led to some dispute on Capitol Hill. Lawmakers from both parties have argued that the Dodd-Frank financial reform law that required the Fed to oversee insurance giants also gave the central bank the power to customize its capital requirements to treat them differently from banks. Among those delivering that message is Sen. Susan Collins (R-Maine), who drafted the amendment giving the Fed the power to set capital requirements in the first place.
But the Fed has repeatedly said that as it interprets the law’s language, it not have the ability to distinguish between the two. That’s led high-ranking lawmakers from both parties to push legislation making that ability clear, although the measure has yet to advance in a Congress dealing with an election-year agenda.