The House of Representatives gave final approval to an insurance-industry supported measure that would allow the Federal Reserve Board flexibility in determining which capital standards to apply to insurers under its supervision.

The House passed the Insurance Capital Standards Clarification Act of 2014 — S. 2270 — which the Senate passed earlier this year, on Wednesday. The measure calls for amending the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 to give the Federal Reserve flexibility to set capital standards for insurance companies. The Federal Reserve has held that it must use generally accepted accounting principles, which are used in banking, to measure insurers' capital adequacy rather than the statutory accounting principles used by state insurance regulators. The bill allows the use of statutory accounting principles.

Insurers have expressed concern that underwriters that fell under Fed supervision as systemically important institutions under Dodd-Frank would be subject to what they regarded as bank-centric rules.

The measure now goes to the president for his signature.

Insurance groups praised the House action.

The American Insurance Association “is pleased that the House has again approved insurance capital standards clarification legislation,” said Leigh Ann Pusey, president and CEO of the Washington-based insurer group, in a statement. “The legislation recognizes that there are fundamental differences between the insurance business model and the banking business model. The bipartisan legislation clarifies the Federal Reserve Board's ability to tailor insurance-based capital standards for those insurers subject to Federal Reserve supervision.”

The Property Casualty Insurers Association of America “has long been advocating domestically and internationally against imposition of inappropriate bank-centric capital requirements on insurers,” said Nat Wienecke, PCI's senior vice president of federal government relations, in a statement. “PCI is pleased that this legislation takes into account the unique nature of insurers' risks, which are fundamentally different from those for banking, and clarifies the Federal Reserve Board's authority to tailor capital standards to insurance companies under its supervision.”