State regulators are not seeking help from Washington with monitoring those private equity firm owners, the officers of the National Association of Insurance Commissioners wrote in a public letter sent to Brown earlier this week.
Brown is the chairman of the U.S. Senate Banking, Housing and Urban Affairs Committee.
The NAIC officers told Brown that U.S. life insurers have been writing complicated products and using large, complicated investment strategies for some time.
“Our system has experience at assessing and understanding this dynamic through market highs and lows,” the regulators said. “State insurance regulators are fully capable of assessing and managing the risks of these insurers, and there is nothing PE firms add to the playing field that changes this fact.
Both the House and Senate stimulus measures would give the weakest plans enough money to pay hundreds of thousands of retirees — a number that will grow in the future — their full pensions for the next 30 years. The provision does not require the plans to pay back the bailout, freeze accruals or to end the practices that led to their current distress, which means their troubles could recur. Nor does it explain what will happen when the taxpayer money runs out 30 years from now.
Senator Sherrod Brown, a Democrat from Ohio who has been leading the charge to rescue the ailing pension plans, said that including the provision in the relief bill is a “really big deal” for both the retirees who depend on the money and the employers now being crushed by promises they cannot afford to keep.