Randam Ron Paulism
The original American patriots were those individuals brave enough to resist with force the oppressive power of King George. I accept the definition of patriotism as that effort to resist oppressive state power. The true patriot is motivated by a sense of responsibility, and out of self interest -- for himself, his family, and the future of his country -- to resist government abuse of power. He rejects the notion that patriotism means obedience to the state. […] Resistance to illegal and unconstitutional usurpation of our rights is required. Each of us must choose which course of action we should take: education, conventional political action, or even peaceful civil disobedience to bring about necessary changes. But let it not be said that we did nothing. Let not those who love the power of the welfare/warfare state label the dissenters of authoritarianism as unpatriotic or uncaring. Patriotism is more closely linked to dissent than it is to conformity and a blind desire for safety and security. Understanding the magnificent rewards of a free society makes us unbashful in its promotion, fully realizing that maximum wealth is created and the greatest chance for peace comes from a society respectful of individual liberty.”
In the Name of Patriotism (Who are the Patriots?), May 22, 2007
FIO Focus, No. 63: Federal Reserve Requests Financial Data to Study Effects of …
On September 30, 2014, the Board of Governors of the Federal Reserve System (the Board) invited firms substantially engaged in insurance underwriting activities to participate in a voluntary data collection exercise known as a quantitative impact study (QIS). The results of the QIS will be used to analyze the impact of the Board’s regulatory capital framework on firms engaged in insurance activities and to allow further review of concerns that were raised by commenters during the Board’s rule-making process.
When the Board finalized its capital requirements for bank holding companies in July 2013, it exempted savings and loan holding companies (SLHC) with substantial insurance underwriting activity (insurance SLHC) from application of those rules. The idea was to provide the Board with more time to determine how capital and leverage rules should be modified for insurance SLHCs. According to the Board’s cover letter for the QIS, it wishes to better understand how to design a capital framework for insurance holding companies in light of the Collins Amendment to the Dodd-Frank Act. The letter explains that the Collins Amendment (§171 of the Dodd-Frank Act) requires the Board to establish minimum risk-based and leverage requirements for firms regulated by the Board that are no less than those that apply to insured depository institutions.
The QIS is a request for the voluntary submission of detailed financial data. According to the Board, the insurance holding companies that it supervises have been contacted about the QIS. The QIS itself is divided into four parts:
- Part I: A section on regulatory capital components and ratios which calculate a common equity tier 1 capital ratio, a tier 1 capital ratio, a total capital ratio and a tier 1 leverage ratio
- Part II: A calculation of risk-weighted assets
- Part III: An analysis of separate account data
- Part IV: A report of state or foreign risk-based capital requirements
The Board is requesting consolidated balance sheets prepared according to U.S. Generally Accepted Accounting Principles (GAAP). In the QIS instructions, the Board recognizes there will be challenges for entities that currently report only on a statutory accounting principles basis (SAP) or on some other non-U.S. GAAP basis. For example, the instructions make it clear that certain non-GAAP balances may have to be converted to GAAP amounts. The instructions acknowledge that this may present a challenge for many items on the balance sheet, including, for example, the valuation of certain intangible assets such as goodwill.
One of the items companies will report under Section IV will be the aggregate amount of state risk-based capital requirements for insurance underwriting activities.
Report submissions are requested by December 31, 2014, and submissions should be based on financial data as of December 31, 2013. Templates for submissions as well as instructions have been provided by the Board. The Board anticipates there will be additional follow up with the participating firms to better understand the submissions.
Without citing any specific authority, the Board indicated that “[D]ata and responses provided via the QIS will be used and maintained in a manner that is designed to preserve firm anonymity and confidentiality.” The Board stated that it may share the information with “other regulators” and that the information “may be published in aggregate form in a manner that preserves firm anonymity and data confidentiality in connection with the Federal Reserve’s supervisory or regulatory duties.”
Finally, one of the items is the estimated cost of developing U.S. GAAP- based consolidated reporting capability. In addition, the Board is seeking information about the cost of the initial implementation, the time required for a full conversion, the ongoing costs of such a conversion, including external audit fees, and any other information that would help the Board understand the effort necessary to establish U.S. GAAP-based consolidated reporting capability.