Just before the end of 2014, the President signed legislation amending the Dodd-Frank Wall Street Reform and Consumer Protection Act to clarify capital requirements for insurance companies that own banks.

On December 18, 2014, the President signed S. 2270, the Insurance Capital Standards Clarification Act of 2014 (Pub. Law No. 113-279). S. 2270 amended section 171 of the Dodd-Frank Act, also known as the Collins amendment after Senator Susan Collins (R-Me), which requires the US federal banking agencies to establish consolidated minimum capital requirements for insured depository institutions and their holding companies, and for nonbank financial companies deemed of systemic risk and supervised by the Federal Reserve Board (SIFIs). The requirements could not be any lower than what was in effect for insured depository institutions at the time of passage of Dodd-Frank.

The original language of Section 171 did not make any distinctions for the types of companies that might own insured depository institutions and whether they might be subject to another regulatory regime. Insurance companies that owned insured depository institutions argued that they already were subject to capital requirements under applicable state insurance laws.

Senator Collins had informed the Federal Reserve Board that it should take into account the differences between banking and insurance when promulgating these minimum capital standards. The Federal Reserve took the position that Section 171 in its original form did not allow it to make such distinctions.

As enacted, S. 2270 specifically provides that in setting the consolidated minimum capital requirements for holding companies of insured depository institutions, the federal banking agencies shall not be required to include a person that is regulated by an insurance regulator, to the extent that the person acts in its capacity as a regulated insurance entity.

In addition, S. 2270 provides that to the extent that a depository institution holding company or a SIFI is also a regulated insurance entity and files financial statements with its insurance regulator using Statutory Accounting Principles (standard accounting principles for insurance companies), it will not be required to recalculate such financial statements in accordance with Generally Accepted Accounting Principles (standard accounting principles for banking organizations).