The US House of Representatives has passed legislation that will remove the “systemically important” designation from insurers and banks.

The Financial Choice Act amends the Dodd-Frank Wall Street Reform Act that saw a number of insurers ­– Allianz, AIG, Aviva, Axa, Ping An, Prudential and MetLife – designated in the legislation.

This was taken to mean the insurers were “too big to fail”.

However, MetLife successfully challenged the designation, which was removed after a long and expensive court battle. The Government has appealed this court decision, but no judgment had been handed down by the end of last week.

The new act, passed with a majority of 47, sees the Volcker Rule on certain speculative investments repealed and the elimination of the Federal Deposit Insurance Corporation’s orderly liquidation authority.

This will remove a number of regulatory restrictions on insurers while also modifying insurance regulations.

The Federal Insurance Office – which was formed in 2010 to monitor states’ regulation of the industry – is being replaced with an “Independent Insurance Advocate” to act for policyholders.