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From Banking and Finance Law Daily, June 13, 2016

Financial Services to mark up international insurance standards, senior financial protection bills

By Colleen M. Svelnis, J.D.

The Committee on Financial Services has scheduled a full committee hearing to mark up legislation, including banking-related bills intended to protect seniors from financial fraud, and oversight related to international insurance standards. According to the committee memo, the markup is schedule for June 15, 2016.

Protecting seniors. The Senior$afe Act of 2016 was introduced by Reps. Kyrsten Sinema (D-Ariz), Bruce Poliquin (R-Maine), Patrick E. Murphy (D-Fla), and Mick Mulvaney (R-SC). H.R. 4538 would bolster communication among individuals, financial institutions, and appropriate state and federal agencies when financial exploitation of seniors is suspected. H.R. 4538 encourages firms to train employees to identify and stop financial fraud. The measure would provide immunity from suit for individuals who have received training should they disclose potential examples of financial exploitation of seniors, provided that the disclosure was made in good faith and with reasonable care. To be granted immunity, an individual would have to have served as a supervisor, compliance officer, or legal advisor for a covered agency. A "covered agency" under the measure is a state or federal financial regulatory agency, law enforcement agency, or state adult protective services agency (see Banking and Finance Law DailyFeb. 16, 2016).

Insurance standards. The Transparent Insurance Standards Act (H.R. 5143) was introduced by Rep. Blaine Luetkemeyer (R-Mo), and is intended to increase transparency and strengthen Congress’s role in supervising foreign insurance standards by overseeing standard setting organizations. The legislation would establish a framework before U.S. representatives to the International Association of Insurance Supervisors (IAIS) are permitted to consent to the adoption of any international insurance standard, the lawmaker stated. The Federal Reserve Board and Treasury Department would be required to publish a proposed standard and comment request in the Federal Register (see Banking and Finance Law DailyMay 4, 2016).

A group of insurance associations, which represent the "vast majority" of the U.S. insurance industry, have sent a letter in support of H.R. 5143. The joint letter expresses the importance for state and federal representatives "to have a united voice in international regulatory discussions." The letter was addressed to Luetkemeyer, who is the Chairman of the Subcommittee on Housing and Insurance, and states that H.R. 5143 successfully addresses "a number of the critical concerns raised" and establishes safeguards that increase transparency and accountability in international insurance regulatory standard setting.

Scheduled for markup. The following bills are also scheduled for markup:

  • H.R. 4850, the Micro Offering Safe Harbor Act, was introduced by Rep. Tom Emmer, Jr. (R-Minn), and would exempt certain securities from Securities and Exchange Commission and state registration requirements.
  • H.R. 4852, the Private Placement Improvement Act of 2016, was introduced by Rep. Scott Garrett (R-NJ), and would prevent the SEC from adopting proposed additional obligations relating to exemptions from registration requirements for certain sales of securities under Regulation D.
  • H.R. 4854, the Supporting America’s Innovators Act of 2016, was introduced by Patrick Timothy McHenry (R-NC) and would amend an exemption from registration under the Investment Company Act of 1940 by increasing the investor limitation from 100 to 500 persons for a qualifying venture capital fund.
  • H.R. 4855, the Fix Crowdfunding Act, was also introduced by McHenry, and would update rules for "crowdfunding" under Title III of the Jumpstart Our Business Startups (JOBS) Act, including raising the dollar amount limit on funds that can be raised via crowdfunding and clarifying certain requirements and exclusions for funding portals.
  • H.R. 5311, the Corporate Governance Reform and Transparency Act of 2016, was introduced by Reps. Sean Duffy (R-Wis) and John Carney (D-Del), and would provide for, among other things, the registration of proxy advisory firms with the SEC and the management of conflicts of interest.
  • H.R. 5322, the U.S. Territories Investor Protection Act of 2016, was introduced by Nydia Velasquez (D-NY), and would amend Section 6(a)(1) of the Investment Company Act of 1940 to terminate an exemption for investment companies located in Puerto Rico, the Virgin Islands, and any other possession of the United States.
  • H.R. 5421, the National Securities Exchange Regulatory Parity Act of 2016, was introduced by Rep. Ed Royce (R-Calif), and would amend Section 18 of the Securities Act of 1933 to apply the exemption from State regulation of securities offerings to securities listed on a national security exchange that has listing standards that have been approved by the SEC.
  • H.R. 5424, the Investment Advisers Modernization Act of 2016, was introduced by Rep. Robert Hurt (R-Va) and would modernize requirements relating to investment advisers and tailor regulation for private equity firms that the Dodd-Frank Act required to be registered with the SEC.
  • H.R. 5429, the SEC Regulatory Accountability Act, was introduced by Garrett and would require the SEC, when promulgating a new rule, to assess the costs and benefits of a regulatory action, regulatory alternatives, and impact on small business and market liquidity.
  • The Iranian Leadership Asset Transparency Act was introduced by Bruce Poliquin (R-Maine), and would require the Treasury Secretary to develop and post online a list estimating the "funds and assets" held by senior Iranian political and military leaders, along with a description of how they acquired the assets and how those assets are employed.

Companies: Independent Insurance Agents & Brokers of America; National Association of Mutual Insurance Companies; Property Casualty Insurers Association of America; U.S. Chamber of Commerce

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