The U.S. House of Representatives approved a bill that would ease capital and liquidity standards for insurers under the Dodd-Frank Act. A major insurance lobbying group, meanwhile, heralded the vote as a “common sense solution.”

“Passage of the capital standards legislation provides a measure of common sense to the regulatory authority provided for in the Dodd-Frank Act,” Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, said in prepared remarks. “If the Federal Reserve is going to have supervision over insurance companies, it should have the ability to do so using appropriate capital standards.”

NAMIC and other insurance groups and companies have rallied for the change to Dodd-Frank, which currently mandates the Federal Reserve to impose minimum capital requirements for bank holding companies and savings and loan companies, and also applies to some global insurers who have multiple businesses. Until now, the Federal Reserve has applied banking standards to those affected insurance companies including AIG and Allianz. Insurers rely on different accounting rules to measure financial health.

“Congress has provided the clarity sought by the Fed and resolved the issue,” Grande said. “Those insurers subject to supervision by the Fed can now be measured using the standards that best reflect their financial health, rather than standards designed for the banking industry.”

The House unanimously passed the bill Wednesday to give the Federal Reserve flexibility in setting the standards. The Senate unanimously approved the legislation in June and it now heads to President Barack Obama’s desk for his signature.

“We applaud Congress for passing the legislation and hope it can continue to work toward bipartisan, common sense solutions to the issues facing our nation,” Grande said.

Insurance companies had lobbied for the change to the 2010 Dodd-Frank financial-regulation overhaul, seeking to roll back the tougher rules. The insurers were supported by Federal Reserve Chair Janet Yellen and Governor Daniel Tarullo.

“Congress deserves tremendous credit,” MetLife Inc. Chief Executive Officer Steven Kandarian said in a statement. “The Fed now has the opportunity to write rules that will preserve competition and ensure affordable access to financial security.” MetLife is the largest U.S. life insurer.

The bill is S. 2270.

*Material from the National Association of Mutual Insurance Companies was included in this report.