The US Federal Reserve could be required to set up a new policy advisory committee on international capital standards (ICSs) for insurers, under a legislative proposal introduced in the US Senate.
The bipartisan bill also requires the Fed to conduct an impact study on the alignment of US rules with global standards and testify before Congress on its activities at the International Association of Insurance Supervisors (IAIS) and the Financial Stability Board.
"We need to bring more accountability and transparency to the international insurance process," said Democratic Senator Jon Tester. "This bill will add safeguards to better protect consumers and provide Congress with more oversight."
Discussions on the development of an ICS for large insurers with cross-border businesses have been high on the agenda of US lawmakers, who fear these would be incompatible with the existing state-based regulatory system.
In April, another bipartisan bill was tabled in the House of Representatives that introduces new requirements on federal authorities responsible for designating insurers as systemically important financial institutions (Sifis).
The Fed is currently devising capital requirements for the insurers it supervises, which include the three designated Sifis - AIG, Prudential Financial and MetLife - and dozens of other firms that have banking businesses.
This comes as the IAIS is finalising the work on the ICS and the additional capital buffer for systemic insurers, known as the higher-loss absorbency or HLA. While the two processes run in parallel, US lawmakers are concerned that global standards will force the US system to be dismantled or add to the burden of insurers.
Republican Senator Dean Heller said: "Our country has a unique 50 state-based insurance regulation system that has served us well and must be preserved. This bipartisan legislation will establish critical principles and increase Congressional oversight of the Fed and Treasury Department in order to ensure our best interests are represented at international insurance discussions."