NAIC cracks down on risky feeder funds

Vehicles have been used by insurers to invest in ‘weird and wonderful’ assets, say practitioners 

aerial view of streams feeding into a river delta

US insurance regulators are moving to stamp out a loophole exploited by some insurers to invest in risky assets such as private equity while minimising capital charges. 

So-called feeder funds, also known as rated feeder notes, are often used by insurers as a capital-efficient way to invest in assets like private debt. But some insurers have been using the funds to invest in riskier assets, too. 

A proposal from the National Association of Insurance Commissioners (NAIC) due to come into force in

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