Sept. 3 discussion by Capitol Forum centered on life and annuity insurers’ rising exposure to private credit and the potential spillover to the broader financial system.
Nick Nemeth said the main vulnerabilities lie in valuation and liquidity, with insurers holding hard-to-price private credit assets that could prove difficult to sell under stress.
The call also highlighted affiliated investments and hidden concentrations as insurers become more intertwined with private equity firms and asset managers.
Reinsurance structures and risk-based capital calculations were another focus, raising questions about whether current regulatory tools can keep pace with financial innovation.