A lack of consensus among state regulators on captive insurance companies and reserves is creating an uncertain environment for the U.S. life insurers, which could ultimately adversely affect insurer ratings, according to a new Fitch Ratings' report.

The New York State Department of Financial Services (NYSDFS) recently published very critical commentary alleging weaknesses in the regulation exhibited by other states, as well as the oversight provided by the National Association of Insurance Commissioners (NAIC). The department's focus was on captive arrangements described as shadow insurance, Actuarial Guideline 38 (AG38) and principles-based reserving (PBR).

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