Private equity firms may see their efforts to acquire insurance companies come under heavier regulation, according to a recent statement from Benjamin Lawsky, New York State’s first Superintendent of Financial Services.
Last year Guggenheim Partners agreed to “heightened policyholder protections” as part of its acquisition of Sun Life Insurance and Annuity Company of New York, in order to gain the approval of the New York Department of Financial Services (DFS).
Changes could also see greater transparency and disculousre requirements, according to Reuters, in a bid to protect annuity-holders.
“We’re seeking to strike an appropriate balance that keeps markets open to new entrants, while at the same time putting in place necessary safeguards,” Lawsky, pictured, said.
He previously raised concerns over a spike in private equity firms moving into the annuity business. He said, “private equity firms typically have a more short-term oriented business model than traditional insurers, and the annuity business is focused on ensuring long-term security for policyholders.”
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