On October 26, 2017, the Treasury Department released the third of four reports produced at the request of the Trump administration. This document examines the current regulatory framework for the Asset Management and Insurance industries and makes recommendations to align the regulatory framework with the Administration’s Core Principles for financial regulation.1 “The regulatory framework for both the asset management and insurance industries can be significantly improved,”2 said Treasury Secretary Steven Mnuchin, “We are recommending more efficient and effective regulation to give consumers access to the products they need while providing individuals with opportunities to save for retirement.”3 One recommendation supported the delay in implementation of the Department of Labor’s (DOL) fiduciary rule pending further evaluation by the DOL, the Securities and Exchange Commission (SEC) and the States, stating that it will improve the regulatory framework for asset managers and insurers as well as the products and services they offer.4


What this means

The U.S. asset management and insurance industries are global leaders in promoting vibrant capital markets and diverse investment opportunities. Nine of the top ten global asset managers are headquartered in the United States, and the U.S. insurance market is the largest in the world, representing 29% of the global market.5 Treasury’s review of the regulatory framework for both asset management and insurance firms has identified significant opportunities for reform, including:6

1. Ensuring appropriate evaluation of systemic risk and solvency:

  • Entity-based evaluations of systemic risk are usually not the best approach for mitigating risk in the asset management and insurance industries. The Treasury supports moving to an activities-based framework to identify certain business activities with higher systemic risk traits.
  • Treasury rejects the need for stress testing of asset management firms, and proposes a strong risk management framework to mitigate liquidity risk that may arise during a scenario of mutual fund redemptions.
  • Treasury supports robust capital and liquidity standards for insurers and encourages State Insurance Commissioners to work with the Federal Reserve Board for an efficient and effective regulatory framework.

 2. Promoting efficient regulation and rationalizing the regulatory framework to decrease regulatory burden and maximize product and service offerings:

  • Recalibration of regulations is important in the asset management and insurance industries where many laws and regulations have origins dating to the 1930s and 1940s.
  • For asset manager’s the SEC should implement regulations to standardize and simplify the approval process for exchange-traded funds (ETFs), modernize fund disclosure material through electronic delivery of shareholder information, and harmonize fund reporting requirements to eliminate duplicative processes.
  • Treasury recommends uniform approval processes and standards at the state level for insurers, and supports the National Association of Insurance Commissioners in establishing uniform state laws for protecting customer data. State laws should be uniform in order to reduce compliance costs for multi-state insurers.

 3. Rationalizing U.S. engagement in international forums to promote the U.S. asset management and insurance industries:

  • Treasury recommends continued U.S. engagement in international forums as international regulations are debated and standards crafted.
  • Such engagement would promote the U.S. asset management and insurance industry and ensure their involvement in ongoing policy formulation and the international standard-setting process.

 4. Enhancing consumer access to a variety of relevant products and services to promote economic growth and informed choices.


One of the key characteristics of the asset management industry is the huge array of choices available to investors – more than 9,500 mutual funds and 1,700 ETFs offering multiple asset classes, operate in the United States. In addition to funds, the asset management industry provides advisory services to individual accounts, and this accessibility to multiple products and services facilitates capital formation and hence economic growth. In addition to economic growth, regulation can also affect investment products and services, may lead to an increase in investment-related costs and a loss of investment opportunities: 

  • Treasury supports the DOL’s reexamination of the implications of the fiduciary rule, and a delay is appropriate until the relevant issues are addressed to best serve retirement investors. The SEC and the DOL are encouraged to work together, and with the States to implement a regulatory framework appropriately tailored to both preserve investor choice and protect retirement investors in an efficient and effective way.
  • Treasury recognizes the increasingly important role of the life insurance industry, and recommends strengthening consumer access and choice to products such as annuities within 401ks.
  • Infrastructure investment is a top priority for the Trump Administration, and to promote robust infrastructure investment the Treasury recommends a reevaluation of state insurance capital requirements, and how they may be better calibrated to promote insurer infrastructure investment.
  • Treasury will convene an inter-agency task force to develop policies complementing state level reforms of the regulation of Long-Term Care insurance.



For this third report, as with the first two, Treasury consulted with the member agencies of the Financial Stability Oversight Council (FSOC), as well as a wide range of other stakeholders, including trade groups, financial services firms, consumer and other advocacy groups, academics, legal experts, and others with relevant knowledge.7 As with the previous reports, this one also zeroed in on reducing overlap and duplication in Federal regulation, as well as reining in certain parts of the Dodd-Frank Act. The fourth and final report on nonbank financial institutions, financial technology and financial innovation is forthcoming.8



  1. “Treasury Releases Third Report On The Administration’s Core Principles For Financial Regulation,” U.S. Department of the Treasury, Press Release. Access at: https://www.treasury.gov/press-center/press-releases/Pages/sm0193.aspx
  2. Ibid
  3. Ibid
  4. “Treasury Backs DOL Fiduciary Rule Delay,” ThinkAdvisor, October 27, 2017. Access at: http://www.thinkadvisor.com/2017/10/27/treasury-backs-dol-fiduciary-rule-delay
  5. Treasury Releases Third Report On The Administration’s Core Principles For Financial Regulation,” U.S. Department of the Treasury, Press Release. Access at: https://www.treasury.gov/press-center/press-releases/Pages/sm0193.aspx
  6. “A Financial System That Creates Economic Opportunities – Asset Management and Insurance,” U.S. Department of the Treasury, October 2017. Access at: https://www.treasury.gov/press-center/press-releases/Documents/A-Financial-System-That-Creates-Economic-Opportunities-Asset_Management-Insurance.pdf
  7. “Treasury Backs DOL Fiduciary Rule Delay,” ThinkAdvisor, October 27, 2017. Access at: http://www.thinkadvisor.com/2017/10/27/treasury-backs-dol-fiduciary-rule-delay
  8. Ibid

Newsletter Author: Venetia Woo, Mairi Bryan

Newsletter Contact Person: Mairi Bryan

Visit www.accenture.com/RegulatoryCompliance for latest insights on regulatory remediation and compliance transformation.



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