
US insurance regulators move to kill CLO arbitrage
Capital charges on collateralised loan obligations will be model-based after 2024

US regulators are taking steps to end the regulatory arbitrage that arguably has helped fuel buying of collateralised loan obligations (CLOs) by insurers in recent years.
Last week, the National Association of Insurance Commissioners moved forward with a rule change that from the end of 2024 will link CLO capital charges to the regulator’s own modelling rather than CLO ratings.
The switch to a modelled approach is expected to remove an inconsistency in existing charges that means insurers hold
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Court showdown looms for SEC private adviser rules
Legal victory for the regulator would establish new powers of prohibition, critics claim
Iosco warns of leveraged loan ‘vulnerabilities’
As recovery rates plummet, report calls for clearer covenants and more transparency on addbacks
SEC rewrite of criteria for investor ‘group’ alarms buy-siders
Hedge funds fear it will freeze out activists and have chilling effect on everyday discussions
An NAIC plan to second-guess bond ratings is ‘nonsensical’, insurers say
Proposal to create “quasi rating agency” at regulatory body sparks backlash from industry and US Congress
Buy-siders cheer SEC climbdown on loans
Agency stays silent in court case considering whether syndicated loans are securities
Run risk on funds not a systemic issue, say market participants
FSB and Iosco are consulting on drive to make open-ended funds adopt anti-dilution tools
SEC plans ‘pose reverse-engineering threat to quant funds’
Managers say proposed disclosure rules would lead to less efficient markets
Hedge funds raise stakes in fight over dealer rule
Two prominent industry bodies file legal papers in key court case over SEC’s proposed extension of dealer definition