Reuters: Regulatory News: US insurers must set aside more capital for mortgages-regulator

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US insurers must set aside more capital for mortgages-regulator Oct 26th 2012, 21:58 Fri Oct 26, 2012 5:58pm EDT Oct 26 (Reuters) - Insurers must set aside more capital against their mortgage-related investments to protect against possible future downturns in the housing market, state regulators agreed on Fri day. The National Association of Insurance Commissioners, a group of state insurance commissioners that regulates the industry, had expressed concern about whether insurers had enough capital on hand under current rules. Under Friday's agreement, an NAIC official said, insurers will have to set aside 3.2 percent of their holdings in reserve against losses, up from 2.7 percent. The industry will have to set aside between $600 million to $800 million more against mortgage bonds that are not backed by the government, according to the Wall Street Journal. A life insurance industry trade group, The American Council of Life Insurers, had said recently that the proposed increase was too steep, according to the Journal report.

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