US insurers face 15% capital hike for CLO equity next year

Insurance regulator agrees ‘compromise’ solution to delay increase until 2024

capital increase

The US insurance regulator has agreed new, interim, capital rules for insurers that hold the riskiest tranches of collateralised loan obligations (CLOs). The new rules, though, will take effect only in 2024.

Risk-based capital charges for so-called “residual tranches” are set to rise from 30% to 45%, after a National Association of Insurance Commissioners (NAIC) working group voted unanimously to make the change. The proposal now passes to committee for adoption.

The working group had mooted

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