• The risky assets include collateralized loan obligations (CLOs), which resemble the collateralized debt obligations (CDOs) at the center of the 2008 financial crisis.
• But the NAIC sees no cause for alarm.
  • "However, while the relative size of this asset class for the sector has been growing, it represents only 2.6% of total cash and invested assets at year-end 2020, and most of the investments held by the industry are of a higher quality.
  • The NAIC has performed multi-scenario stress tests on industry CLO portfolios and closely monitors their performance."
• But some followers of these matters were rankled by what they perceived as the letter's "nothing to see here" tone.
  • "The response is certainly no surprise," said Tom Gober, a Virginia-based forensic accountant who has documented the tens of billions of dollars of annuity liabilities that a handful of PE-led annuity issuers have reinsured offshore, often with affiliated reinsurers.
    • "The NAIC's leaders apparently huddled around and threw a bunch of points at Brown that, in a vacuum, sound fine.
      • But when you are familiar with the details, the letter is mainly fluff, and grossly inadequate.

2022 0603 - Retirement Income Journal - NAIC Reassures Congress on Private Equity-Led Insurers, By Kerry Pechter  ---  [BonkNote]  ---  [link]