New York cracks the whip on captives
It has been reported that the New York Department of Financial Services has sent letters to 80 insurance companies regarding their handling of captive insurance companies, in an attempt to gain full disclosure about captives’ financial health.
The companies are required to respond to the missive from the state inquiry by 8 August.
State officials are concerned that the captive arrangements may give a false impression of the insurer’s financial health, particularly in cases where the captive is funded using a letter of credit that allows the bank to hold the parent company responsible for the debt.
The companies targeted include MetLife and Lincoln National Corp.