The Securities and Exchange Commission has been in communication with large insurance companies — including Chesterfield-based Reinsurance Group of America — about the use of “captive” entities.
Captives are used by reinsurance companies that take on business only from their parent companies. Some state regulators have raised concerns that the use of the entities allows companies to mask their financial health by moving business to the entities, the Wall Street Journal reports.
The SEC is pushing for the insurers to disclose the potential costs if they are forced to stop using the entities. In a letter responding to the SEC, RGA said it might have to increase some of its products’ prices, among other effects, if the use of captives is discontinued.
Chesterfield-based Reinsurance Group of America Inc. is among the largest global providers of life reinsurance and reported revenue of $9.84 billion for 2012.