A senior Republican member of the House Financial Services Committee plans to introduce legislation next week that would bar federal regulators from designating insurance companies as systemically significant.
Rep. Scott Garrett, R-N.J., disclosed his plans in comments at the House FSC hearing where Treasury Secretary Timothy Geithner reported to the committee on the first year’s operations of the Financial Stability Oversight Council.
Garrett is the second most powerful member of the House FSC, serving as chairman of its key Capital Markets Subcommittee.
The legislation is likely to run into strong opposition. The insurance industry vehemently opposes a SIFI designation, but does want the Federal Insurance Office, also created by DFA, to help its members negotiate trade agreements with foreign countries on favorable terms.