While the private equity stake in insurance companies is still relatively small, it has attracted the notice of regulators. The Life Actuarial Task Force, a National Association of Insurance Commissioners' entity, is proposing a new actuarial guideline for asset adequacy testing. It would apply to life insurers with more than $500 million of general account actuarial reserves and at least 5% of high-net-yield supporting assets. In a recent paper, Greg Hoffnagle, a partner in Goodwin’s Financial Industry group and Insurance practice, highlighted a National Association of Insurance Commissioners’ list of 'Regulatory Considerations Applicable (But Not Exclusive) to Private Equity Owned Insurers.' “Regulators may not be obtaining clear pictures of risk due to holding companies structuring contractual agreements in a manner to avoid regulatory disclosures and requirements,” he wrote, and that “control considerations may exist with less than 10% ownership. Read the Insurance NewsNet article here.
In The Press April 27, 2022