The end game draws closer for new insurance capital regimes

Posted by Andrew Mais, senior manager, Deloitte Services LP, on June 28, 2016

Who is Leon Lett? He is the football player who almost got the record for the longest fumble return in Super Bowl history – 64 yards. But Lett started celebrating just before reaching the end zone, Don Beebe knocked the ball out of his hand and the play ended as a fumble, not a touchdown.

After an unexpected and spectacular play, there may be an all too human tendency to start celebrating before crossing the goal line. Some US insurers have watched with concern over the years as it seemed international supervisors were about to impose non-US influenced supervisory regimes on their operations. Now they may feel like the beneficiary of a Hail Mary pass after the Federal Reserve’s (Fed) recent issuance of its Advance Notice of Proposed Rulemaking on capital standards for insurance systemically important financial institutions (SIFIs) and for the other insurers it supervises, those with savings and loan holding companies (SLHCs).

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FRB, FDIC issue feedback on 2015 resolution plans of eight US G-SIBs


Posted by Marlo Karp, Deloitte Advisory Partner on April 15, 2016.

On April 13, 2016, the Federal Reserve Board (FRB) and Federal Deposit Insurance Corporation (FDIC) announced credibility determinations and released firm-specific feedback on the 2015 resolution plans submitted by eight US global systemically important banks (G-SIBs) under Section 165(d) of Dodd-Frank.

In conjunction with this announcement, the FRB and FDIC released guidance for the next full plan submissions for these eight US G-SIBs, which are due by July 1, 2017.

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FRB Issues Guidance Consolidating Capital Planning Expectations for All Large Financial Institutions


Posted by David Wright, Deloitte Advisory Director on January 26, 2016.

Ever since the first bank stress tests were conducted during the financial downturn, regulatory expectations for capital planning and stress testing have been evolving as both bank supervisors and the industry have gained knowledge and experience. Over the years, those rising expectations have been communicated through examination letters, regulations, range of practice guidance, and capital planning instructions. While those various communications were helpful, they were not memorialized in one set of comprehensive guidance, nor did they address how expectations might differ depending on a firm’s size and complexity—until now.

On December 21, 2015, the Federal Reserve Board (FRB) released guidance—in the form of two Supervision and Regulation Letters (SR Letters)—that consolidates the capital planning expectations for all large financial institutions and clarifies differences in those expectations based on firm size and complexity.

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OCC Proposes Guidelines to Expand Recovery Planning Requirements to the Largest National Banks

Recovery Planning
Posted by Robert Burns, Deloitte Advisory Director on January 21, 2016.

On December 17, 2015, the Office of the Comptroller of the Currency (OCC) proposed Guidelines to establish standards for recovery planning that would apply to insured national banks, insured federal savings associations, and insured federal branches of foreign banks with more than $50 billion in assets.
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Federal Reserve proposes rule to require largest banks to hold minimum amounts of unsecured long-term debt

Federal Reserve proposes rule to require largest banks to hold minimum amounts of unsecured long-term debt
Posted by David Wright on November 5, 2015.

On October 30, 2015, the Board of Governors of the Federal Reserve System (Federal Reserve) unanimously approved an important proposed rule that seeks to improve the likelihood that the largest banking organizations can fail without the use of taxpayer funds or destabilizing the financial system. The proposal would establish new Total Loss-Absorbing Capacity (TLAC) and related Long-Term Debt (LTD) requirements for US banking organizations deemed to be “global systemically important banks” (GSIBs) as well as US Intermediate Holding Companies (IHCs) of foreign GSIBs. In her prepared remarks for the Federal Reserve’s open meeting on the proposal, Chair Janet Yellen argued that the new rules, in conjunction with other regulatory efforts to improve the resolvability of GSIBs, would “substantially reduce the risk to taxpayers and the threat to financial stability stemming from the failure of these firms.”

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Proposed CCAR attestation change would be about more than just forms

CCAR attestation change would be about more than just forms
Posted by David Wright, on October 05, 2015.

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Expectations for the largest banks continue to rise with the latest Federal Reserve proposal for CFOs to attest to the integrity and accuracy of the firm’s regulatory stress testing reports. On September 16, 2015, the Fed published a proposal in the Federal Register to revise the FR Y-14A/Q/M Capital Assessments and Stress Testing Reports.  While proposed changes to reporting forms and instructions are typically viewed as a routine process, the inclusion of a CFO attestation of the filed reports, for both the actual data as well as the projections, raises the bar on expectations and accountability and reflects the Federal Reserve’s ongoing concerns with data quality.

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Fed FAQs for FBOs

The Securities and Exchange Commission Reforms Money Market Rules

On June 26, 2014, the Federal Reserve (Fed) published answers to a list of frequently asked questions (FAQs) from foreign banking organizations (FBOs) that face enhanced prudential standards — including formation of an intermediate holding company (IHC) for non-branch U.S. operations and submission of an Implementation Plan. Many of the questions were generated from a town hall meeting the Fed conducted in May 2014 to help selected FBOs understand the planning requirements and timing associated with the enhanced standards.

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Dodd-Frank Four Years Later

Dodd-Frank Four Years Later

The fourth anniversary of the Dodd–Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) is a perfect opportunity to reflect on the progress that has been made since the Act’s passage in 2010 and to look forward to the required regulations that have to be implemented. The law was a direct response to the financial downturn, and was specifically designed to prevent a similar crisis from happening again. So how are things going so far?

Overall, it’s a mixed bag. Considerable progress toward implementation and reform has been made in some areas, while others are just getting warmed up.

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