“This bill attaches three divisive measures that make substantive changes to the Dodd-Frank Wall Street Reform law to a bipartisan, Senate-passed measure that makes technical changes to the law,” said Rep. Maxine Waters, D-Calif., ranking minority member of the Financial Services Committee.

Moreover, action on the bill in the last week Congress is expected to be in session before the mid-terms makes virtually certain that the House will not act on legislation reauthorizing a federal backstop on terrorism risk.

That increases the risk that the ultimate legislation enacted on TRIA reauthorization will impose greater liability for terrorism risk on insurance that underwriters, insureds and rating agencies will be comfortable with. That could lead to higher prices for the product as well as a decline in takeup rates.

According to analysts at Washington Analysis, a buy-side securities analytical firm, unlike the Senate measure, the House bill would expand exemptions for bank ownership of collateralized loan obligations (CLOs) under the Volcker Rule, as well as marginally expand the definition of a Qualified Mortgage (QM).

“These additional provisions could jeopardize the ability of the Senate to approve the package with unanimous consent (a requirement if the bill is to pass into law this week), as it only takes a single Senator to oppose the measure and derail fast-track approval,” the analysts said.

The measure was sponsored by Reps. Andy Barr, R-Ken., Gary Miller, R-Calif., Bill Huizenga, R-Mich., and David Scott, D-Ga.

“The legislation passed today makes it clear that the Fed shall apply capital standards appropriate to insurers and must accept the Statutory Accounting Principles used by state regulators to oversee insurance companies,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies.

Nat Wienecke, senior vice president, federal government relations at the Property Casualty Insurers Association of America (PCI), said that, “While the Federal Reserve Board has acted prudently in delaying imposition of bank capital standards on insurers until Congress can clarify the situation, “the potential burdens if not addressed would harm consumers and job growth.”

Leigh Ann Pusey, president and CEO of the American Insurance Association, said, “Insurers operate under a fundamentally different business model that requires different financial regulatory standards. The model, which is already supported by insurance financial regulation, largely isolates insurers from runs on the institution.”

Charles Symington, senior vice president of external and government affairs for the Independent Insurance Agents and Brokers of America (IIABA), considered the House action to be a common-sense solution to a technical issue within Dodd-Frank.

“The IIABA has long supported the premise that banking and insurance are different and therefore should have distinct regulatory standards. We appreciate the House vote on this legislation,” Symington said.

The provision at issue in the DFA was sponsored by Sen. Susan Collins, R-Maine, as Congress acted to strengthen insurance supervision in the wake of the catastrophic failure of American International Group.

It would impact insurers such as American International Group and Prudential Financial that have been designated as systemically significant financial institutions (SIFI), and perhaps MetLife, which has been preliminarily designated a SIFI.

It also impacts mutual insurance companies such as State Farm and USAA which the Fed oversees as their consolidated regulator because they operate savings and loan holding companies (SLCC). It does so by preventing the Fed from making them prepare financial statements in accordance with generally accepted accounting principles, when they are already preparing financial statements in accordance with state-based statutory accounting principles.