The US House of Representatives has passed a bill to establish the Federal Insurance Office.

The Wall Street Reform and Consumer Protection Act includes provision for the office to act as an information agency and assist with co-ordination of international trade agreements. Federal regulators will also have greater power to intervene in the US insurance industry.

In addition the bill will create a consumer financial protection agency and a new federal system risk regulator, although the consumer agency will not extend to property and casualty insurance.

Treasury Secretary Tim Geithner says passage of the legislation will “end loopholes that allowed big Wall Street firms to escape supervision” and “make it clear that no firm is too big to fail”.

The legislation has won the general approval of US trade associations for taking a measured approach to insurance regulation, including exclusion from consumer financial protection.