State insurance regulators are thinking about the idea of making it easier for life insurance companies invest in stock.
A team at the National Association of Insurance Commissioners, the Life Risk-Based Capital Working Group, is asking for public comments on a stock-investment proposal from Allstate Corp.’s life insurance business.
Allstate told the working group that, today, regulators impose a big penalty on stock holdings when calculating a life insurer’s risk-based capital (RBC) ratio.
Allstate has asked regulators to cut the size of the stock investment penalty for assets used to support products that are designed to lock in the customer’s money for many years, such as payout annuities.
The penalty is now 30%. Allstate says it would like to see the penalty fall to 15% or 20%.
The working group has posted a copy of Allstate’s proposal here.
Comments are due Sept. 20.
State insurance regulators developed the insurance company RBC ratio to give themselves a quick way to see how an insurer is doing.