Life Insurance Regulation Focus

Friday, May 15, 2015

By Cassi Teti

With the life insurance drama of the mid-1980’s to early-1990s, where many policyholders were falling victim of life insurance companies insolvencies, many regulations were put into action to counter these issues and make sure the insurance companies upheld their contractual obligations with their clients. Today, the life insurance industry is highly regulated; making sure their number one priority is on protecting the public from any potential insolvencies.

There are 7 main regulations that life insurance companies must adhere to:

  1. Conservative Reserves
  2. Conservative Capital
  3. High Quality General Accounting Assets
  4. Cash Flow/Liquidity Testing
  5. Restrictions Between Insurance Subsidiaries and Parent Holding Companies
  6. Insurance Company Financial Statement Reviews
  7. Mandated Annual CPA Audits and Periodic State Examinations

To learn more, read M Financials detailed summary here.