Principles of risk
The US introduced more sophisticated capital requirements for variable annuities a year ago. Regulators now plan to apply this approach to other insurance products and equity-indexed annuities could be first on the list. Blake Evans-Pritchard reports
Something of a sea change is taking place in the US life insurance industry at the moment. Faced with an increasingly innovative range of investment products, US regulators have been pushing for an equally sophisticated set of rules for determining statutory reserves and minimum capital for all life companies, based on a less formulaic methodology that draws on firms' own actuarial experience.
These have so far only been applied to so-called variable annuity (VA) products, which offer investors
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