Insurers’ favourite credit rating becomes more expensive
US institutions face a dilemma: go up a rating and lose yield or go down a rating and increase risk
Insurance companies have a capital problem. The charges on fixed-income investments that insurers rely on to meet their liabilities are in flux. At the end of the year, US regulators will increase the capital that insurers set aside for assets with an A credit rating – their favourite – by as much as 160%. Charges will change for other ratings too.
The National Association of Insurance
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