|[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
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
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
The full report, "Group Capital Standards for U.S. Insurers" available
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.
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