US Life Insurer Investment Risk Rising from Private Letter Ratings
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The rapid growth of private letter ratings (PLRs) raises risks for U.S. life insurers as it coincides with the industry’s move toward more complex, opaque investments untested by a macroeconomic downturn. Key watch items include effectiveness of impending regulation, percentage of capital invested in PLR-rated issuers, illiquidity, and valuation methodologies regarding governance, subjectivity, reliability, and transparency.
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