Proposed new regulations outlined Thursday by the Obama administration would rein in financial services companies like never before.

If passed by Congress, the rules would give the government new powers to take over insurance companies and strictly regulate the largest financial service companies. Also, they would regulate hedge funds, venture capital and private equity funds for the first time, and implement new rules for money market funds to prevent rapid, mass withdrawals.

The financial sector is certainly eyeing these proposals closely. But how will all this affect the average person?

Here are some questions and answers about the proposed regulations and what they mean to you.

QUESTION: What does the Obama administration hope to accomplish through these regulations?ANSWER: Treasury Secretary Tim Geithner told the House Financial Services Committee on Thursday that the financial services system is unstable and fragile and has failed in fundamental ways. He said inadequate checks and balances had attracted fraud and consumer protection had failed.Addressing those issues, he argued, requires rules that are "simpler and more effectively enforced and produce a more stable system, that protects consumers and investors."

QUESTION: How would regulations be tightened?A: For starters, the government is proposing that an existing agency, or perhaps a newly created one, be given the power to regulate any type of company whose failure could harm the entire financial services industry. That could be banks, insurance companies, hedge funds and others.The most significant change is that this agency would have enough power to force a company to take action such as increasing capital, changing accounting policies or reducing debt to remain financially solid."Retail investors should find it reassuring that financial institutions will probably be subject to what I will call financial adult supervision," said John Coffee, a securities professor at Columbia Law School. "It will keep them from betting the ranch on one investment strategy or leveraging up to the eyeballs."Geithner did not suggest which agency should get all this power and Coffee said that was probably intentional because it will be a major sticking point as the proposal goes through Congress.

QUESTION: How might insurance companies be affected?ANSWER: The administration proposes giving the federal government the right to take over operations of insurance companies and other financial institutions much as it can with banks already.The Treasury Secretary, in consultation with the president, would be able to act after the Federal Deposit Insurance Corp. and the Federal Reserve Board determine a company may fail. The government could temporarily take over the company or place it in receivership and wind down its operations. It could lend money, buy assets or buy stock in the company as part of its effort to fix the problems.The regulation would be modeled on current FDIC bank regulations.

QUESTION: What will happen to my insurance policies and annuities?ANSWER: Insurance companies are largely regulated by states, which creates a patchwork of varying rules that can drive up costs. Uniform federal government oversight could improve efficiency and ultimately lower costs for consumers, said Jack Dolan, a spokesman for the American Council of Life Insurers.The $5 trillion life insurance industry, which serves 75 million customers, operates under a regulatory system mostly created in the 1800s, Dolan said."We just really are in a new era where you do need to have someone at the federal level overlooking the whole landscape of financial services and seeing where problems might arise."

QUESTION: How are banks reacting to the proposals?ANSWER: A trade group for the nation's banks opposed any changes that would detract the focus of the Federal Reserve Board in forming monetary policy or the FDIC's mission of insuring bank deposits."It is dangerous to risk confusing the mission of the FDIC and detracting from the power of its image in the minds of depositors," Edward L. Yingling, chief executive of the American Bankers Association, said in a statement. Besides, he said, banks pay tens of billions of dollars for FDIC operations "and it would be completely unfair to pull resources from the banking industry to resolve nonbanks."

QUESTION: How would the regulations affect hedge funds and risky, exotic types of investments?ANSWER: Hedge funds and other funds like venture capital funds above a certain level of assets would have to register with a government regulator. Geithner didn't say, however, what kind of authority the government would assert once the funds register.

QUESTION: What happens next with the proposals?ANSWER: They require congressional approval and will be proposed in many separate pieces of legislation. The Obama administration is pushing for quick action and has already sent Congress the first bill.