ACLI President & CEO David Chavern offered the following comments on the recent Bloomberg column “UBS Boss Is Right on Private Credit Rating Risks”:

State insurance regulators focus on far more than “the prices and treatment of consumers.” They impose stringent capital and reserve regulatory requirements on life insurers to make sure they remain financially sound and able to meet their long-term promises. 

Moreover, private investments held by insurers are subject to rigorous regulation, asset-adequacy testing and detailed disclosures and credit quality assessments by organizations like the National Association of Insurance Commissioners.

The system is recognized internationally as a model of strong regulation, intensive supervision and advanced analytics. It has proven its effectiveness over time as evidenced by the rarity of life insurance company insolvencies. It is also a key reason why life insurers are able to meet their commitments even during turbulent times. For example, at the height of COVID, life insurers paid a record $100 billion to beneficiaries while still holding capital levels well above regulatory minimums.