Investments - Risk & Regulatory Consulting

Investments

RRC has the resources to assist state insurance departments in meeting the requirements and demands of an increasingly complex investment market. We also work closely with insurance companies and other market participants to understand how investments fit within the regulatory framework.

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Insurer investments have evolved over the years from the straightforward to include the more esoteric as the industry has had to meet market demands and changing market dynamics. Investment vehicles have grown increasingly complex, markets more volatile and vulnerable to new pressures. The takeaway from the market meltdown of 2008 is that insurer portfolios require a more risk-focused and macro approach to management and oversight.

RRC’s investment team has broad experience across all of the asset classes and investment strategies found within insurance company portfolios. This includes years of hands-on work as analysts, traders and portfolio managers, as well as an extensive background working with the NAIC and state regulators in the development of regulatory guidance. Our experience stretches from more traditional corporate bonds to structured securities, including RMBS and CMBS, and commercial real estate investments, as well as derivatives use and securities lending practices.

What We Offer

VARIETY OF SERVICES

New investment vehicles and strategies entail different characteristics and different risks that require different skills. Traditional credit analysis can be supplanted by other investment risks – including market value volatility, cash flow variability and liquidity.

RRC works primarily with state insurance departments on financial examinations as well as special projects. Our investment specialists have decades of direct knowledge and experience in the investment markets, and have developed the skills to evaluate investment portfolios across the spectrum of size and complexity among insurance companies. Intimately familiar with the NAIC’s risk-focused surveillance process, RRC performs in-depth reviews of an insurer’s investment strategies and is well-equipped to analyze the range of assets held by insurers, concentrating on where there may be existing or latent issues that could materially impact the solvency or financial stability of the insurer. The RRC team can also thoroughly vet an insurer’s investment policies and compliance procedures.

Portfolio Analysis:

Analysis of investment portfolios, focusing on credit, market and liquidity issues
Review investment strategies and their appropriateness for the insurer type and peer group
Review compliance with stated investment policies and regulatory guidelines

Detailed Asset Reviews:

In depth analysis of investments within asset classes in the insurer’s portfolio
Focus on differing investment risks given current market conditions

Derivatives Use Plans:

Review Derivatives Use Plans focusing on maintaining necessary board and management governance; reporting and valuation guidelines

Investment Management Agreements:

Review of Investment Management Agreements
Analysis of conflicts of interest guidelines, governance and reporting responsibilities, fee structures
Analysis of related investment policy statements and guidelines

Special Projects:

Evaluate the structure of different investment vehicles with an emphasis on regulatory treatment
Analyze the risk profile of investment policy statements and strategies

For More Information 855-246-0815

Contact RRC

Contact Me

Edward Toy

Investment Specialist

Senior Manager

edward.toy@riskreg.com

917-561-5605

Expertise

Our Investment Team is part of a full- service regulatory consulting firm that meets the broad range of client needs. We work closely with financial analysts and examiners, among others, in the regulatory community. We also keep close contact with the broad range of investment market participants.

With the team’s extensive experience, it is well-equipped engage in detailed discussions with chief investment officers, portfolio managers and key investment professionals.

We understand the regulatory landscape and participate in industry and regulatory initiatives in the development of new regulatory guidance for insurers’ invested assets. We have experts in Statutory Accounting Principles and Risk-Based Capital.

Our investment experts pay close attention to state investment laws and regulatory guidelines while emphasizing the need to take a broader, macro view on investment strategies and practices. Market forces can have a substantial impact on portfolios and an insurer’s ability to meet policyholder claims, the effectiveness of derivatives use and hedging strategies, other insurer practices such as securities lending, and liquidity risk assessment.

We make the connection between capital markets and regulation.