The US hybrids market is open again to insurance companies, after a six-month hiatus in which the capital charges assigned to these instruments were temporarily over-restrictive.
Insurance regulator, the NAIC, has bowed to pressure from issuers and investors to reclassify hybrid securities as debt or preferred stock, slashing the capital charge from 30% to 1% and below.
The case is a good example of the dangers of overweening regulation. While hybrids were classified as common equity with a 30
The week on Risk.net, July 7-13, 2018Receive this by email