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TMCNet:  Fitch: Insurance Regulators Step Up Activity

[December 19, 2013]

Fitch: Insurance Regulators Step Up Activity

NEW YORK --(Business Wire)--

Link to Fitch Ratings' Report: Group Capital Standards for U.S. Insurers
http://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=723763

Five years after the financial crisis, insurance regulators in the U.S. and abroad are stepping up efforts to show progress toward group level supervision and capital standards. 2013 saw several large global insurance groups designated as "systemically important" and subject to stricter supervision and higher capital requirements at the holding company level.

In the U.S., there is a high degree of regulatory uncertainty caused by the designation of certain life insurers as nonbank systemically important financial institutions (SIFI), the role of the federal government in regulating insurance more broadly and various initiatives at the state supervisory level.

To date, American International Group, Inc. (AIG) and Prudential Financial, Inc. (PFI) have been designated as nonbank SIFIs, and MetLife, Inc. (MET) is currently in the final stage of the three-step review process. Insurers designated as nonbank SIFIs are expected to be regulaed by the Federal Reserve Board and subject to enhanced supervision and prudential standards.

While we expect that SIFI-designated insurers in the U.S. and abroad will be subject to increased capital requirements and higher costs associated with increased regulatory compliance, the exact nature of the risk/capital regime remains highly uncertain and specifics surrounding implementation remain unclear. As a result, rating implications are equally uncertain.

The full report, "Group Capital Standards for U.S. Insurers" available at www.fitchratings.com, highlights significant recent regulatory developments in group supervision and capital standards and expectations going forward.

The above article originally appeared as a post on the Fitch Wire credit market commentary page. The original article can be accessed at www.fitchratings.com. All opinions expressed are those of Fitch Ratings.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON (News - Alert) THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.


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