PE - Private Equity
- NAIC - CIPR - Private Equity - [link]
- https://content.naic.org/sites/default/files/capital-markets-special-reports-PE-owned-YE2021.pdf
- 2024 0104 - WSJ - Private Equity’s Move Into Insurance Provokes Systemic-Risk Concerns: Private equity’s ties to insurers were already criticized for posing risks to policyholders’ nest eggs. Now the Treasury and IMF say those investments warrant greater monitoring for possible threats to the financial system, By Chris Cumming - [link-Paywall Free]
- In recent weeks, the Financial Stability Oversight Council—a U.S. Treasury Department panel formed to protect the financial system—and the International Monetary Fund both released reports questioning whether private-equity control of insurance companies makes the financial system less stable.
- - FSOC - Report -
- 2019 12 - IMF - Report - Private Equity and Life Insurers, by Fabio Cortes, Mohamed Diaby and Peter Windsor International Monetary Fund - [link-to page for download]
- Just a few days earlier, the FSOC issued a similar call, asking insurance overseers to evaluate how private-equity involvement in the sector—along with other long-term changes to the industry—could play into systemic risk.
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ApolloGlobal Management pioneered the insurance strategy through its 2009 creation of Athene Holding, which grew to become one of the largest U.S. sellers of annuities.
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Blackstone, KKR, Ares Management, Carlyle Group and Brookfield were among the large asset managers that followed Apollo’s lead, either by buying insurers or reinsurers outright or making substantial investments in them. These five firms have made or announced at least nine major insurance investments since 2020.
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- In recent weeks, the Financial Stability Oversight Council—a U.S. Treasury Department panel formed to protect the financial system—and the International Monetary Fund both released reports questioning whether private-equity control of insurance companies makes the financial system less stable.
- 2021 0424 - NBC - Private equity is buying up annuity and life insurance policies. That may be bad for consumers - [link]
- 2021 0921 - WSJ - Who Owns Your Life Insurance Policy? It Might Be a Private-Equity Firm Insurers such as Allstate and Voya have pulled back from the business, creating an opening for asset managers with a higher appetite for risk, by Leslie Scism - [link]
- 2022 0715 - ThinkAdvisor - Some State Lawmakers Troubled by Private Equity's Growing Life & Annuity Stake, By Allison Bell - [link]
- 2022 0908 - GOV (Senate) - Current Issues in Insurance, Sherrod Brown (D-OH) --- [BonkNote]
- 2022 - NAIC - Re: Comments Regarding NAIC Macroprudential (E) Working Group exposed “Regulatory Considerations Applicable (but not exclusive to) Private Equity Owned Insurers - 85p
- 2022 0603 - Retirement Income Journal - NAIC Reassures Congress on Private Equity-Led Insurers, By Kerry Pechter --- [BonkNote] --- [link]
- 2021 0424 - NBC - Private equity is buying up annuity and life insurance policies. That may be bad for consumers - [link]
- In February, KKR bought a 60% stake in insurer Global Atlantic for more than $4 billion.
- More than 2 million people have fixed annuities, life insurance other policies with Global Atlantic.
- In January, Blackstone agreed to buy Allstate Life Insurance Company for $2.8 billion.
- Sixth Street Partners announced a deal to buy Talcott Resolution Life Insurance Company, which owns a large block of legacy insurance business, in January.
- The current Talcott owners are a group of private-equity firms that had bought Hartford Financial Services Group’s annuity business, consisting largely of legacy variable annuity contracts, in 2018.
- Similarly, in 2018, Voya Financial divested more than $50 billion of legacy fixed and variable annuities to Apollo Global Management, Crestview Partners and Reverence Capital Partners. The buyers rebranded the segment as Venerable Insurance.
- In February, KKR bought a 60% stake in insurer Global Atlantic for more than $4 billion.
- (p10) - John Garamendi, California Insurance Commissioner:
- Another troublesome question is whether the U.S. Labor Department's Pension Benefit Guaranty Corporation is liable for possibly millions of dollars due to beneficiaries of terminated pension plans. Why terminated? So that the plan's sponsors, that is the employers, could use the plan's excess funds, for whatever reason, by converting the plan's obligations into insurance annuities.
- The tragedy is that, while the direct pension obligations were guaranteed by the Federal Government, the insurance annuities, according to the PBGC, are not.
- Moreover, this transfer was usually done without the pensioners' knowledge, and certainly without their consent and, in at least one case, over their objections.
- Another troublesome question is whether the U.S. Labor Department's Pension Benefit Guaranty Corporation is liable for possibly millions of dollars due to beneficiaries of terminated pension plans. Why terminated? So that the plan's sponsors, that is the employers, could use the plan's excess funds, for whatever reason, by converting the plan's obligations into insurance annuities.
Executive Life Insurance Failure, Charles B. Rangel (D-NY) --- [BonkNote]