Brief History

1601 First insurance legislation in the U.K. enacted. Modern insurance has its root in this law concerning coverages for merchandise and ships.

1735 Friendly Society, first insurance company in the U.S., established in Charleston, S.C. The mutual insurer went out of business in 1740.

1759 First life insurance company, established in Philadelphia by the Synod of the Presbyterian Church.

1762 Equitable Life Assurance founded. Was the world’s oldest mutual insurer until it failed in 2001.

1782 Pennsylvania chartered first bank in the U.S.

1790 The federal government refinanced all federal and state Revolutionary War debt, issuing $80 million in bonds. These became the first major issues of publicly traded securities, marking the birth of the U.S. investment markets.

1791 Secretary of the Treasury, Alexander Hamilton, established First Bank of the United States.

1792 Insurance Company of North America, first stock insurance company, established.

1792 The Buttonwood Agreement, pact between 24 brokers and merchants to trade securities on a common commission basis, marked the origins of the New York Stock Exchange. Bank of America was first listed stock.

1809 Rhode Island was the scene of first bank failure.

1849 New York passed first general insurance law in the U.S.

1850 Franklin Health Assurance Company of Massachusetts offered first accident and health insurance.

1863 Office of the Comptroller of the Currency established in the U.S. Treasury Department. Authorized to charter banks and issue national currency.

1875 American Express established first pension plan in the U.S.

1880 First corporate surety company established.

1890 First policies providing benefits for disabilities from specific diseases offered.

1898 Travelers Insurance Company issued first automobile insurance policy in the U.S.

1909 St. Mary’s Cooperative, first U.S. credit union, formed in New Hampshire. Massachusetts passed first state credit union law.

1911 Group life insurance for employees introduced.

1913 Federal Reserve established to replace J.P. Morgan as lender of last resort.

1916 National Bank Act, limiting bank insurance sales, except in small towns, passed.

1920 Financial options introduced.

1924 First mutual funds established in Boston.

1929 Stock market crash. Nearly 10,000 U.S. banks failed.

1932 Federal Home Loan Bank Act established Federal Home Loan Bank System to act as central credit system for savings and loans institutions.

1933 Glass-Steagall Act, separating banking and securities industries, passed by Congress.

1933 Federal Deposit Insurance Corporation, guaranteeing accounts up to $2,500, opened. Securities Act of 1933 passed.

1933 Regulated registration and offering of new securities, including mutual funds, to the public.

1934 Securities Exchange Act passed. Authorized Securities and Exchange Commission to provide for fair and equitable securities markets.

1934 Federal Savings and Loan Insurance Corporation established by Congress to insure savings and loans deposits.

1934 Replaced by Savings Association Insurance Fund in 1989.

1934 Federal Credit Union Act of 1934 authorized establishment of federally chartered credit unions in all states.

1936 Revenue Act of 1936 established tax treatment of mutual funds.

1940 Investment Company Act set structure and regulatory framework for modern mutual fund industry.

1944 National Association of Investment Companies, predecessor to the Investment Company Institute, formed and began collecting statistics.

1950 First package policies for homeowners insurance introduced.

1955 First U.S.-based international mutual fund introduced.

1956 Bank Holding Company (BHC) Act, putting multiple bank holding companies under federal supervision, passed.

1956 Stipulates that nonbanking activities of BHCs must be “closely related to the business of banking.”

1960 Bank Merger Acts of 1960 and 1966 set standards for mergers and placed them under federal authority.

1961 Banking industry introduced fixed-rate certificates of deposit.

1962 Keogh plans, providing savings opportunities for self-employed individuals, introduced under the Self Employed Individuals Tax Retirement Act.

1968 Mortgage insurance introduced.

1968 Federal flood insurance program established with the passage of the National Flood Insurance Act. It enables property owners in communities that participate in flood reduction plans to purchase insurance against flood losses.

1970 U.S. government introduced mortgage-related securities to increase liquidity.

1970 National Credit Union Administration created to charter and supervise federal credit unions.

1970 National Credit Union Share Insurance Fund created by Congress to insure members’ deposits in credit unions up to the $100,000 federal limit. Administered by the National Credit Union Administration.

1971 Municipal bonds insured for first time in arrangement between American Municipal Bond Assurance Corporation (predecessor to Ambac Assurance Corporation) and Borough Medical Arts Building in Alaska.

1971 NASDAQ, the first electronic stock market, was introduced by NASD, then known as the National Association of Securities Dealers. NASDAQ was spun off in 2000.

1972 Money market mutual funds introduced.

1974 Automated teller machines (ATMs) widely introduced.

1974 Employee Retirement Income Security Act (ERISA) set minimum standards for pension plans in private industry; established the federal Pension Benefit Guaranty Corporation to protect pension benefits.

975 SEC deregulated broker commissions by eliminating fixed commissions brokers charged for all securities transactions.

1976 First individual variable life insurance policy issued.

1977 Banking industry introduced variable rate certificates of deposit.

1977 Community Reinvestment Act passed to encourage banks to meet credit needs of their local communities.

1978 International Banking Act limited the extent to which foreign banks could engage in securities activities in the U.S.

1979 Congress created the Central Liquidity Facility, credit union lender of last resort.

1980 Depository Institutions Deregulation and Monetary Control Act provided universal requirements for all financial institutions, marking first step toward removing restrictions on competition for deposits.

1908 The Office of the Comptroller of the Currency and the Federal Reserve authorized banks to establish securities subsidiaries to combine the sale of securities with investment advisory services.

1982 Garn-St. Germain Depository Institutions Act authorized money market accounts and expanded thrifts’ lending powers.

1982 Stock market futures contracts introduced.

1983 Federal government introduced collateralized mortgage obligations.

1883 Bank of America bought discount securities broker, Charles Schwab. Schwab reacquired the discounter in 1987.

1987 Federal Reserve ruling interpreting Section 20 of Glass-Steagall as permitting separately capitalized affiliates of commercial bank holding companies to engage in a variety of securities activities on a limited basis.

1989 Financial Institutions Reform, Recovery and Enforcement Act established, providing government funds to insolvent savings and loan institutions (S&Ls) from the Resolution Trust Corporation and incorporating sweeping changes in the examination and supervision of S&Ls.

1989 Savings Association Insurance Fund, deposit insurance fund operated by the FDIC, established.

1990 J.P. Morgan permitted to underwrite securities.

1992 European Union’s Third Non-Life Insurance Directive became effective, establishing a single European market for insurance.

1994 Riegle-Neal Interstate Banking and Branching Efficiency Act allowed bank holding companies to acquire banks in any state and, as of June 1, 1997, to branch across state lines.

1995 U.S. Supreme Court ruled in NationsBank vs. Variable Annuity Life Insurance Company that annuities are not a form of insurance under the National Bank Act, thus allowing national banks to sell annuities without limitation.

1995Private Securities Litigation Reform Act of 1995 enacted to reduce the number of frivolous securities fraud lawsuits filed.

1996 Barnett Bank U.S. Supreme Court decision allowed banks to sell insurance nationwide.

1996 Section 20 of Glass-Steagall amended to allow commercial bank affiliates to underwrite up to 25 percent of revenue in previously ineligible securities of corporate equity or debt.

1997 The Financial Services Agreement of the General Agreement on Trade in Services provided framework to reduce or eliminate barriers that prevent financial services from being freely provided across national borders, or that discriminate against foreign-owned firms.

1998 Citibank and Travelers merged to form Citigroup, a firm engaged in all major financial services sectors.

1999 Gramm-Leach-Bliley Financial Services Modernization Act allowed banks, insurance companies and securities firms to affiliate and sell each other’s products.

2001 U.S. House of Representatives Banking Committee renamed itself the Financial Services Committee.

2002 JPMorgan Chase introduced an annuity, becoming one of the first banking companies to underwrite an insurance product under the Gramm-Leach-Bliley Act.

2002 Sarbanes-Oxley Act enacted to increase the accountability of the boards of publicly held companies to their shareholders.

2002 Strengthened the oversight of corporations and their accounting firms.

2002 President Bush signed the Terrorism Risk Insurance Act (TRIA), whereby private insurers and the federal government share the risk of future losses from terrorism for a limited period.

2003 State regulators and the Securities and Exchange Commission (SEC) launched investigations into late trading and market timing in the mutual funds and variable annuities industries.

2003 Fair and Accurate Credit Transaction Act (FCRA) enacted to provide uniform rules for banks, insurers and others who use credit information, and to provide credit fraud and identity theft protections.

2004 New York Attorney General Eliot Spitzer, the Securities and Exchange Commission, and a number of state regulators launched investigations into insurance industry sales and accounting practices.

2005 Federal Bankruptcy Prevention and Consumer Protection Act was enacted to tighten rules for personal bankruptcy.

2005 Citigroup sold off its Travelers’ life insurance unit, following the spin off of its property/casualty business in 2002. This dissolved the arrangement that led to the passage of the Gramm-Leach-Bliley Act in 1999.

2006 President Bush signed the Federal Deposit Insurance Reform Conforming Amendments Act of 2005, which merges the Bank Insurance Fund and the Savings Association Insurance Fund into the new Deposit Insurance Fund, increases the deposit insurance limit for certain retirement accounts from $100,000 to $250,000, and indexes that limit to inflation.

2006 Congress passed landmark pension reform legislation to close funding shortfalls in the nation’s defined benefit system. The act also provides tax incentives for workers to enroll in individual retirement accounts, secures the legality of cash balance pension plans and permits automatic enrollment in employer-sponsored defined contribution pension plans such as 401(k)s.

2006 Massachusetts became the first state to pass a mandatory universal health insurance law.

2006 NASD and the New York Stock Exchange formed the Financial Industry Regulatory Authority (FINRA), a self regulatory organization to serve as the single regulator for all securities firms doing business in the U.S.

2008 Washington Mutual was taken over by JPMorgan Chase after it was shut down by federal regulators, marking the largest failure in banking history.

2008 The federal government took over Fannie Mae and Freddie Mac and assumed a 80 percent ownership in American International Group, reflecting widespread turmoil in financial markets.

2008 Securities giant Lehman Brothers failed, marking the largest bankruptcy in U.S. history. Two other major securities firms, Goldman Sachs and Morgan Stanley, got federal approval to convert to bank holding companies.

2008 The Emergency Economic Stabilization Act, a $700 billion rescue plan for the U.S. financial services industry, was enacted. The act established the Trouble Asset Relief Program (TARP), which authorized the U.S. government to purchase assets and equity from qualifying financial institutions.

2009 American Recovery and Reinvestment Act, a $787 billion stimulus program to shore up the nation’s economy, was enacted.

2009 The Financial Stability Plan was implemented by the U.S. Treasury to stabilize the financial markets and promote economic recovery.

2010 President Obama signed the Patient Protection and Affordable Care Act, requiring most U.S. citizens to have health insurance.

2010 The Dodd-Frank Wall Street Reform and Consumer Protection Act, a landmark regulatory overhaul of the financial services industry, was signed into law. While retaining state regulation of insurance, the act established the Federal Insurance Office, an entity that reports to Congress and the President on the insurance industry.

2011 Roy Woodall, a former Kentucky insurance commissioner, appointed by President Obama and confirmed by the Senate as a voting member of the Financial Stability Oversight Council, established under the 2010 Dodd-Frank Act, to provide the council with insurance expertise.

2011 Former Illinois Insurance Department Commissioner Michael McRaith appointed by the Secretary of the Treasury as the first director of the Federal Insurance Office, established under the Dodd-Frank Act. Serves in a nonvoting, advisory capacity to the Financial Stability Oversight Council.

2012 On June 28, 2012 the Supreme Court ruled that the 2010 Patient Protection and Affordable Care Act, requiring most U.S. citizens to have health insurance, is constitutional.