The Inflation Management Opportunities In The Insurance Industry Today

Modernizing the NAIC’s investment risk oversight framework

Webinar Replay: What’s next for the rules that govern insurers’ investments?

What’s next for the rules that govern insurers’ investments: Developments from the NAIC’s 2024 Spring National Meeting

What’s next for the rules that govern insurers’ investments: Developments from the NAIC’s 2023 Fall National Meeting

This report reviews the 2023 NAIC Summer Meeting, which brought progress on several initiatives to revise guidelines with potentially far-reaching implications for insurers’ investment strategy and capital markets:

Investment Risk Oversight

Following the Global Financial Crisis (GFC), insurers faced a low-yield environment, prompting a significant shift towards higher-yielding alternative assets. This transition encompassed various strategies, such as private debt and equity placements, structured products, and cost-effective investment vehicles, including custom-designed, non-SEC registered funds tailored to their specific requirements.

Overseeing Designations and the Prudent Use of Agency Ratings

The post-Global Financial Crisis (GFC) low-yield environment had insurers move more heavily toward higher-yielding alternative assets. These included strategies usingprivate placementsof debt and equity, structured products, and lower-cost, efficient investment vehicles, often bespoke private, non-SEC registered funds designed to address insurers’ unique needs.

Top Regulatory Initiatives from the NAIC’s 2023 Summer Meeting

Noticeable shifts in insurers’ investment strategies toward private structured and complex assets had the NAIC embark on significant multi-year updates to the RBC and STAT frameworks ranging from asset classification, designations, reserving (e.g., Actuarial Guideline (AG) 53) to capital assignment.

Changes to negative Interest Maintenance Reserve and implications

In a declining interest rate environment, an insurer could sell fixed-income assets, recognize gains, and increase surplus. In reality, the sale and reinvestment would be in lower-yield assets with insufficient interest payments to support policies. This shortfall highlights the ongoing need for the gains to support the policy block rather than, say, be paid off as a dividend.

What’s next for the rules that govern insurers’ investments: Developments from the NAIC’s 2023 Summer Meeting

The rate of change to the regulatory landscape governing US insurance investments is only accelerating, with broad implications for investment strategy. This report explores developments from the National Association of Insurance Commissioners (NAIC) 2023 Summer National Meeting with possible changes to the treatment of investments.

The NAIC Spring National Meeting Review: What’s Next for the Rules that Govern Insurers’ Investments

The rate of change to the regulatory landscape governing US insurance investments is only accelerating, with broad implications for investment strategy.

Benchmarking the Treatment of CLOs

The proposed model-based designations for CLOs, and the broader move away from agency ratings, is resolving in some dimensions and increasingly uncertain in others.

The Evolving Regulatory Landscape That Governs Insurers' Investments

The rate of change to the regulatory landscape governing US insurance investments is only accelerating, with broad implications for investment strategy.

NAIC Regulatory Treatment Update - CLOs

TheNAIC is proposing to change the treatment of insurers' ~$200 billion CLOs holdings, moving away from relying on agency ratings and toward a modeled-based approach in assigning designations.

Pending Changes for the Capital Treatment of CLOs

Today’s topic is very timely. It is the potential changes in capital charge treatment for CLOs, and we’re joined by two experts today that are going to help us understand the issues at hand. Amnon Levy, CEO of Bridgeway Analytics, led the revision of the C1 factors with both the NAIC and ACLI, and Kevin Croft, professor of practice at Drake University and director of the Kelley Institute for Insurance Innovation.

The Regulatory Savant - An Interview With Amnon Levy of Bridgeway Analytics