Editor's Letter

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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

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