Dutch Insurer Aegon Replaces Generali on 'Too Big to Fail' List

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 [e-mail]

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(END) Dow Jones Newswires

November 03, 2015 06:46 ET (11:46 GMT)

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