On February 9, 2026, the House of Representatives, in a bipartisan vote, approved H.R. 3682. This bill would place additional guardrails on the Financial Stability Oversight Council (FSOC) in designating insurance companies as systemically important financial institutions (SIFI). The FSOC was established in the aftermath of the 2008 financial crisis, to identify risks to financial stability, promote market discipline, and respond to emerging threats to financial stability. A key authority of the FSOC is its ability to designate nonbank financial institutions as SIFIs.

Once an insurance company becomes designated as a SIFI, it is subject to additional regulation by the Federal Reserve Board, in addition to its primary state insurance commission regulator.

A key impact of this piece of legislation on insurance companies is to eliminate uncertainty caused by changing presidential administration priorities. It is notable that only three insurance companies have ever been designated a SIFI, and each of them was subsequently de-designated. Further, there have been no FSOC designation processes initiated since 2014. That said, changing administrations since that time have increased or decreased the hurdle to designating an entity a SIFI. In 2019, guidance under the first Trump administration raised the hurdle to provide that FSOC had to exhaust all other avenues to address systemic risk prior to designating a firm a SIFI. In 2023, new guidance under the Biden administration reversed this guidance and gave FSOC broader discretion to make determinations about the kinds of firms that give rise to systemic risk, which would raise the potential for insurance companies to be designated as a SIFI. The Trump administration last year indicated it intended to revisit this guidance again. The bill largely restores the principle set forth in the 2019 guidance, requiring the FSOC to exhaust other avenues prior to designating an entity a SIFI, including coordinating the approach with the entity’s primary regulator (in the case of the insurance companies, typically the state insurance commission). Importantly, the bill would remove the ability of future presidential administrations to unilaterally change this approach to the designation evaluation.

The bill received strong bipartisan support and support from the business community. The next step will be for the bill to be considered by the Senate. Stay tuned.