NEW YORK May 16 New York's top financial
regulator on Friday proposed tougher rules for private equity
firms and others buying insurance companies, increasing scrutiny
in a bid to protect retirees and others who typically buy
The proposed changes, including more transparency and
disclosure, are modeled on changes the state's Department of
Financial Services has required for such purchases recently.
Last year, for example, Guggenheim Partners agreed to
"enhanced" protections in its purchase of Sun Life Insurance and
Annuity Company to safeguard policy holders.
Benjamin Lawsky, Superintendent of Financial Services, has
previously said he's concerned about private equity firms and
their "short-term focus," given that annuities are often sold to
long-term investors such as senior citizens.
A fixed annuity is an insurance contract that guarantees an
investor a minimum monthly payment.
"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 said in a statement on
The proposed rules include stronger disclosure requirements
and more regulatory scrutiny of dividends, investments,
operations and reinsurance.
The department could also require the acquiring company to
provide more capital as well as create an additional backstop
(Reporting by Luciana Lopez; Editing by Bernard Orr)