Aegon NV, the Dutch owner of U.S. insurer Transamerica Corp., has been added to a list of insurers deemed systemically important by global financial rule makers, while Italy’s Assicurazioni Generali SpA was removed.
The updated list of nine too-big-to-fail insurers was published by the Financial Stability Board, the Basel, Switzerland-based organization set up by the Group of 20 nations. The inclusion of these companies means they may face tougher capital standards and tighter regulation. The list was first published in 2013.
Aegon said Tuesday that it will “work closely” with regulators in planned consultations over the framework for systemically important insurers. About two-thirds of the company’s income comes from Transamerica.
The FSB, led by Bank of England Governor Mark Carney, is among regulators seeking to limit risk at the biggest financial firms to avoid a repeat of government bailouts that were required in the credit crisis. While more rescue funds went to banks, the U.S. had to prop up insurers led by New York-based American International Group Inc., which was hobbled by losses on derivative bets on subprime mortgages.
The original list included AIG, MetLife Inc. and Prudential Financial Inc. of the U.S., Germany’s Allianz SE, Paris-based AXA SA, Italy’s Generali, Prudential Plc and Aviva Plc of the UK and Ping An Insurance (Group) Co. in China.
Capital Requirements
The insurers on the list could face an average increase of 10 percent in capital requirements. The increase would be as high as 18.75 percent for some unregulated-banking activities and as low as 6 percent for traditional insurance products, the International Association of Insurance Supervisors said last month.
Under the so-called higher-loss-absorbency rules outlined by IAIS, the capital standard would be at least 12 percent more than 2015 basic capital requirements for non-traditional insurance. Such coverage could include policies tied to mortgages and variable annuities.
Aegon shares fell as much as 2 percent in Amsterdam trading.