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US insurance regulators move to kill CLO arbitrage

Capital charges on collateralised loan obligations will be model-based after 2024

Equitable HQ, New York
New York-based insurer Equitable is pushing for stricter capital treatment of CLOs
Fletcher6

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

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