NTNI - Nontraditional and Non-insurance

  • 1. MetLife does not engage in non-traditional non-insurance activities that create any appreciable systemic risk.

2014 0730 - Letter - Benjamin Lawsky (New York Superintendent of Financial Services) to Jacob Lew (FSOC, Financial Stability Oversight Council) - re: MetLife Designation - 5p

Section 2 – Elements of the Analysis

  • Question 1. Based on the above characterisation of NTNI, is the terminology “nontraditional” confusing? If so, what might be a better term than NTNI? Additionally, what might be a better term than “traditional” for products and activities that are not NTNI? 
  • Response: Yes, the term “non-traditional” could create confusion.

2016 0125 - American Academy of Actuaries Letter to IAIS - RE: Non-traditional Non-insurance Activities and Products Public Consultation Document (Nov. 25, 2015) - 9p

  • IAIS (2013) continues using the Geneva Association approach to identifying systemic risk activities and then confirming the systemically important insurers and believes that nontraditional (NT) and non-insurance (NI) financial businesses are the ones that create systemic risk in the insurance industry.
  • NTNI activities involve financial features such as leverage, liquidity or maturity transformation; imperfect transfer of credit risks (such as shadow banking); and credit guarantees or minimum financial guarantees.
    • They also involve  products that are more financially complex than traditional insurance products in the shifting of financial market risk to insurers.  (p8)

2020 02 -  SOA - Systemic Risk in China’s Insurance Industry, Society of Actuaries - 55p

The recent financial crisis has revealed that even financially strong insurance groups and conglomerates operating on a core of traditional lines of business may suffer significant distress and become globally systemically important when they expand significantly in non-traditional and noninsurance activities.

In this context, it is important to distinguish between those activities that are regulated as insurance and those that are not.

2011 11 - IAIS - Insurance and Financial Stability - 47p