For insurers, one of the most consequential aspects of the Dodd-Frank Wall Street Reform and Consumer Protection Act is the establishment of the Financial Stability Oversight Council (FSOC).

The primary mission of the FSOC is to monitor financial services firms for signs of systemic risk. While this oversight is aimed largely at banks, the law grants the FSOC authority to require that nonbank financial companies may be supervised by the Board of Governors of the Federal Reserve System if it “determines that material financial distress at such a firm, or the nature, scope, size, scale, concentration, interconnectedness, or mix of the activities of the firm, could pose a threat to the financial stability of the United States.”

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