FDIC Proposes Treating Mutual Insurance Holding Companies as “Insurance Companies”

Insurance companies have long been regulated by state liquidation and rehabilitation schemes.  Now, the FDIC has proposed a rule that would treat mutual insurance holding companies–which can’t actually engage in the business of insurance–as “insurance companies” under the Dodd-Frank Act so that they can be liquidated or rehabilitated under state law, not under federal law.  There are some requirements that a mutual insurance holding company would have to meet in order to qualify, such as:

  • Being subject to the insurance laws of its domicile state;
  • Not being in bankruptcy;
  • Having as its largest U.S. subsidiary an insurer or intermediate insurance stock holding company; and
  • Limiting its investments to securities of an intermediate insurance stocking holding company, the securities of the converted mutual insurance company, or the assets and securities an insurer can hold in its state.

The rule is currently open for public comment through February 13–which means you’ll still have plenty of time to buy that last-minute Valentine’s Day card after commenting.  We’ll continue to report on the evolving Dodd-Frank landscape and how it affects insurers and reinsurers, so be sure to sign up to be notified of the latest developments.

About Brian Jones

I represent clients in all aspects of business litigation, but focus my practice on complex litigation and arbitration matters concerning insurance and reinsurance, antitrust, class actions, securities, real estate disputes, and contract matters. I am the co-chair of the Bose McKinney & Evans Insurance Group. I was listed in the 2017 and 2016 "Best Lawyers in America" for Insurance Coverage and named a "Rising Star" in Insurance Coverage by Super Lawyers in Indiana in 2014. I was also named a "Rising Star" in Business Litigation by Super Lawyers in Indiana in 2013 and 2012, and a 2010 “Rising Star” in Business Litigation in Texas. I am a member of the State Bars of Indiana and Texas, the Defense Research Institute, a former member of the Pro Bono College of the State Bar of Texas, and I am licensed to practice before all state courts in Indiana and Texas, as well as all federal courts in Indiana, the Northern, Western, and Southern Districts of Texas, the Northern District of Illinois, and the United States Courts of Appeals for the Fifth, Seventh, and Eleventh Circuits. I received my bachelor’s degree, cum laude, in political science and my master’s degree in teaching from Trinity University, where I was elected to Phi Beta Kappa. I received my doctor of jurisprudence degree from the University of Texas School of Law, where I was the Director of Communications for the Legal Research Board and a member of the Phi Delta Phi Honor Society. Before attending law school, I taught high school geography, government and economics in San Antonio, Texas.
This entry was posted in Dodd-Frank Act, Liquidation/Rehabilitation, Mutual Companies, Mutual Insurance Holding Companies, Regulation and tagged , , , , . Bookmark the permalink.

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