SUPERINTENDENT DIRECTS LIFE INSURERS TO DISCLOSE INFORMATION
TO ASSESS LIQUIDITY NEEDS
Superintendent Neil D. Levin today announced that
the Department has instructed all life insurers to provide information to assess their
potential short-term cash requirements and the liquid assets that are available to service
these requirements. In addition, the Department is seeking input in the development of
enhanced reporting and more effective asset/liability management practices in the
insurance industry.
The purpose of these actions, which are detailed
in the recently released Circular Letter #35, was prompted by the recent liquidity
problems experienced by General American Insurance Company. The problems at this insurer
revealed deficiencies in the financial reports filed by insurers and in the overall
management of liquidity risk by that insurer.
The information required by the new Circular
Letter will allow the Department to better assess the current liquidity position of life
insurers. More importantly, the Circular Letter solicits input from the industry regarding
revisions to reporting by insurers that will increase the transparency of insurers’
liquidity management. The Department is also requesting comments relating to the
strengthening of asset/liability management by the insurance industry.
"The Department’s actions further goals
shared by both the Department and the industry; improvement of risk management practices
and enhancement in reporting to facilitate better monitoring of risks arising from
asset/liability mismatches," said Levin. |
