H.R. 1478, Policyholder Protection Act of 2015

H.R. 1478

Policyholder Protection Act of 2015

Rep. Bill Posey

November 16, 2015 (114th Congress, 1st Session)

Staff Contact
John Huston

Floor Situation

On Monday, November 16, 2015, the House will consider the H.R. 1478, the Policyholder Protection Act of 2015, under suspension of the rules.  H.R. 1478 was introduced on March 19, 2015, by Rep. Bill Posey (R-FL) and was referred to the Committee on Financial Services, which ordered the bill reported by a vote of 57 to 0 on November 4, 2015.

Bill Summary

H.R. 1478 extends the same solvency protections to insurance policyholders of bank-affiliated insurance companies organized as Savings and Loan Holding Companies (SLHCs) as currently exist for insurers organized as Bank Holding Companies (BHCs).  These protections wall-off healthy insurers from the risk of insolvency should their affiliated bank fail. The bill also requires consultation between the Federal Deposit Insurance Corporation (FDIC) and the state insurance authority regarding whether a lien or seizure would unduly impede or delay the liquidation or rehabilitation of an insurance company. The bill would codify an FDIC regulatory requirement that these consultations occur between the agency and the appropriate state insurance authority.


The Bank Holding Company Act enables state insurance regulators to protect and keep separate the assets of an insurer if the insurer is organized within a Bank Holding Company structure. This ensures that insurance assets are not transferred to a troubled affiliated bank or eligible to be seized during liquidation.

The Dodd-Frank Wall Street Reform and Consumer Protection Act amended federal-banking law to codify what is known as the “Source of Strength” doctrine, which generally mandates that regulators treat all of a bank’s parent holding company’s assets as a “source of strength” during times of financial stress.[1] Due to the ambiguity of the statute, the insurance-related assets of a parent holding company that is organized as an SLHC could be considered eligible assets during such times. H.R. 1478 clarifies that, like a BHC, these insurance assets of an SLHC are not eligible regarding a lien or seizure of bank assets in order to protect insurance policyholder investments.

According to the bill sponsor, “It’s wrong to force middle-class families to put their homeowners’ or life insurance policies at risk because some Wall Street firm made a bad bet. This bipartisan legislation safeguards important policies designed to protect insurance consumers and ensures that insurance claims would continue to be paid.”[2]

[1] 12 U.S.C. 1831o-1
[2] See Rep. Bill Posey Press Release, “Committee Approves Posey’s Bipartisan Bill to Protect Insurance Policyholders from Being Forced to Bail Out Financial Firms,” November 5, 2015.


A Congressional Budget Office (CBO) cost estimate is currently unavailable.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.