US industry split on captives fix

US regulators are trying to patch up rules on captive insurers, but there is little consensus


The year 2013 marked the 10-year anniversary of the first Regulation XXX excess reserve funding transaction. During the early 2000s, the use of securitisations and captive insurers to offload the punitive statutory requirements associated with level premium term insurance (XXX reserves) and universal life with secondary guarantees (ULSG) products (AXXX reserves) became a popular feature of the US market. Insurers, reinsurers, capital markets participants and regulators alike became comfortable w