Schoen interpreted Bernanke's letter as saying that Sec. 171 “explicitly requires that the Fed subject savings and loan holding companies—the current structure of many large insurers—to minimum leverage and risk-based capital rules.

Bernanke included this in the letter despite concerns voiced by both members of the House and Senate that thrifts owned by insurance companies should have their consolidated regulation structured to recognize that their non-thrift-operating subsidiaries are subject to oversight through statutory-accounting principles, and not Generally Accepted Accounting Principles, which govern bank-accounting standards.

This point was made through congressional testimony by both life and property and casualty insurers, including TIAA-CREF and State Farm, and through numerous comment letters to the Fed, as stated by Bernanke in his letter.

Schoen added, “While the Fed acknowledged these concerns, it pointed to its requirement under Dodd-Frank to develop consolidated-capital requirements at the holding-company level….”

But Dave Snyder and Jim Olsen, vice presidents at the Property Casualty Insurers Association of America, argue that language at the bottom of Bernanke's letter states that the concerns voiced by the insurance industry and members of Congress will be taken into account when the Fed imposes the standards.

In these paragraphs, Bernanke says the Fed board “recognizes that these are serious concerns and will carefully consider all of the concerns raised in these comments and your letter over the course of the rulemaking.”

In their reaction to the letter, Snyder and Olsen said PCI appreciates “the board's recognition that there are significant differences between the business models of depository institutions and insurance companies and the commitment to seriously consider these issues.”

Snyder and Olsen added, “We believe the consolidated regulatory-capital requirements for SLHCs [savings and loan holding companies] that are predominantly property casualty insurers should take into consideration their current regulatory-capital requirements, which are appropriate for the business of writing property casualty insurance.”

Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, gave a different interpretation of the letter than PCI, one more consistent with that of Schoen.

Grande said, “We appreciate Chairman Bernanke recognizing the concerns raised by NAMIC and others regarding the potential for ill-fitting bank-centric capital standards being applied to insurance-focused savings and loan holding companies.

“That acknowledgement doesn't mean much, however, if the Federal Reserve intends to apply the same standards to all SLHCs regardless of their focus. Although the chairman cites the Dodd-Frank Act in his reasoning, the members of Congress who voted to pass the act have been clear that they did not intend for insurance-related companies to be swept into banking regulations.”