Groups Oppose Easing Insurer-Reserve Rules

As state insurance regulators fast-track industry proposals to cut the amount of money that life insurers must set aside for benefits, consumer groups and industry watchdogs are crying foul.

The groups, which include the Consumer Federation of America and the Center for Economic Justice, contend the proposals to lower insurers' risk-based capital and reserve requirements are detrimental to owners of life-insurance and annuity contracts because they reduce the financial cushion life insurers have to keep on hand to ensure they can pay claims.

"In the midst of the current financial crisis, it is unseemly even to discuss the idea of weakening the conservative statutory accounting rules that have long been in place for insurance companies," wrote Joseph Belth, editor of the Insurance Forum newsletter, in a letter to the National Association of Insurance Commissioners...

WSJ: Groups Oppose Easing Insurer-Reserve Rules