At a glance
- The proposal follows a sharp acceleration in FABN issuance.
- For general-account buyers of FABN paper, enhanced disclosure would show up in credit work, where issuer-level data on the funding-agreement liability can be weighed against statutory capital.
- The analysis compares the financial profiles of FABN issuers with the broader life insurance industry to assess whether the structure has produced meaningfully higher risk.
The NAIC has proposed enhanced disclosure requirements for funding agreement backed notes (FABNs), according to a Morgan Stanley Investment Management analysis published Nov. 9 in Insurance AUM Journal.
The proposal follows a sharp acceleration in FABN issuance.
For general-account buyers of FABN paper, enhanced disclosure would show up in credit work, where issuer-level data on the funding-agreement liability can be weighed against statutory capital.
The analysis compares the financial profiles of FABN issuers with the broader life insurance industry to assess whether the structure has produced meaningfully higher risk.
The proposal's scope and comment deadline were not specified.
The NAIC has also been reviewing the rated-note feeder structures insurers use to reach private credit, as Private Wealth Daily previously reported.
Reported by the Insurance Credit desk from Insurance AUM Journal. Published . Corrections