WASHINGTON—The Policyholder Protection Act, introduced by Congressman Bill Posey (R-FL) and Congressman Brad Sherman (D-CA), unanimously passed the House Financial Services committee Wednesday by a vote of 57-0.
The Policyholder Protection Actaffirms that resources from an insurance company may not be used to bail out an affiliated financial institution from liquidation under Title II of Dodd-Frank – unless the state insurance commissioner consents. This bill clarifies Dodd-Frank to ensure that resources set aside to satisfy insurance policyholder claims cannot be used to satisfy non-insurance liabilities within a holding company system.
“The unanimous passage of this legislation in Committee proves that there is still room for common sense legislation that protects consumers from the greed and overreach of large financial institutions,” said Sherman in release. “The assets of an insurance company should be walled off from the risky practices of their affiliated financial institutions. The assets of an insurance company are needed to pay claims of their policyholders, and those dollars should not be jeopardized by complex bets, risk taking, or poor management elsewhere within a large financial firm.