More recently, our involvement has included verifying that these insurers are capable of dealing with the unprecedented challenges posed by the COVID event. Another new challenge is understanding and ensuring that firms account for climate-related financial risks.
And a central part of the Fed’s agenda is working with other regulators and the industry to devise an appropriate approach to regulating capital—one that recognizes the unique role of insurance in the financial system and the distinctions between insurance companies and banks. Our deliberate process has helped build confidence among regulators and the industry and is bringing us to consensus.