Dutch Insurer Aegon Replaces Generali on 'Too Big to Fail' List
November 03 2015 - 07:01AM
Dow Jones News
By Archie van Riemsdijk
Dutch insurer Aegon NV is now one of the nine insurance
companies that are essential to the stability of the global
financial system, according to the international Financial
Stability Board.
The board, a global committee of financial regulators, said on
Tuesday that Aegon has replaced Italian rival Assicurazioni
Generali SpA on the list of insurers that are considered "too big
to fail".
The move comes as many international banks and insurers face
more stringent regulation as policy makers strive to shore up the
global financial system from possible future shocks of the sort
that followed the collapse of Lehman Brothers seven years ago.
Designating Aegon as one of the so-called global systemically
important insurers, or G-SII's, will likely require the group to
bolster its finances to meet more onerous regulatory requirements.
Aegon earns most of its income through its U.S. subsidiary
Transamerica.
A higher loss absorbency requirement for will be implemented for
the nine insurers in 2019, the Basel, Switzerland-based FSB
said.
Aegon spokeswoman Debora De Laaf said the implications of the
designation for the Dutch company are not yet clear. "It is too
early to say anything", Ms. De Laaf said.
Aegon had received the FSB news release on Tuesday morning, Ms.
De Laaf said, when asked whether the company was surprised by the
decision. "It is a designation process that takes place annually,"
she said.
According to the FSB, the Dutch insurance company, will require
enhanced group-wide supervision. Aegon operates mainly in the
Netherlands, the U.S., and U.K. though it has some activities
elsewhere in Europe and in Asia.
A group-wide supervisor will be assigned Aegon, with direct
powers over its holding companies and overseeing systemic-risk and
liquidity planning, the FSB said. Aegon will need to set up a
resolution plan to enable the supervisor to wind up the company if
it gets into trouble in a future financial crisis.
Aegon said it will comply with the FSB's requirements and take
part in the debate on the definition of G-SII's.
Write to Archie van Riemsdijk at archie.vanriemsdijk@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 03, 2015 06:46 ET (11:46 GMT)
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