Treasury Recommends Asset Management And Insurance Reforms

The U.S. Treasury Department ("Treasury") published its third report pursuant to President Donald J. Trump's Executive Order 13772, establishing core principles for regulation of the financial system (see coverage of first and second reports). In the new report, Treasury evaluates regulation of the asset management and insurance industries and makes numerous recommendations to enhance the regulatory frameworks for those industries (see also Fact Sheet on report).

In general, Treasury took the position that regulators should not use an entity-based approach to evaluate systemic risk for asset managers or insurance companies. Instead, regulators should use an activities- and product-based approach that would identify certain business activities as having higher systemic risk characteristics. An appropriate regulatory framework would then be established by primary regulators to address elevated engagement in those activities.