A US insurer’s roadmap for navigating the new RBC regs

With the NAIC’s latest revisions to risk-based capital (RBC) charges now on the books, what should US insurers be focused on moving forward? And how have the relative value propositions across fixed income assets and other investments changed as a result? Wellington Management’s Multi-Asset Insurance Strategist Tim Antonelli and Investment Specialist Geoff Austein-Miller share their views and insights.

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The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.


 Tim Antonelli, CFA, FRM, SCR, Multi-Asset Insurance Strategist, Wellington Management           




Geoff Austein-Miller, Investment Specialist, Wellington Management     

Changes in US industry regulations tend to proceed at a slow, sometimes glacial pace. The recent implementation of the National Association of Insurance Commissioners’ (NAIC’s) latest revisions to risk-based capital (RBC) charges for insurers’ fixed income investments was no exception. While US insurers were required to start reporting more detail on their fixed income holdings as of year-end 2020, the NAIC’s new bond risk charges did not fully take effect until year-end 2021 — but they’re finally here.

What remains to be seen is the extent to which these regulatory changes will truly impact the day-to-day portfolio management of insurance company assets and/or their longer-term strategic asset allocation decisions. 



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