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Higher Capital Requirements Proposed for Big Banks, Allstate Threatens Full Withdrawal from CA’s P&C Market & More

July 28, 2023 (1 min read)

Feds Propose Higher Capital Requirements for Big Banks

Federal regulators formally proposed significant changes to the rules governing how much capital larger banks must hold to cushion them from financial losses. The changes, which could increase the high-quality capital requirements for banks with $100 billion or more in total assets by 16 percent, are likely to draw significant industry pushback. (LAW360)

Allstate Official Warns Insurer Could Pull Out of CA Entirely Unless Changes Made

At a July 13 public workshop hosted by California’s insurance department to discuss the possibility of using catastrophe modeling in ratemaking, Parr Schoolman, chief risk officer for Allstate Property and Liability advocated for other changes, including speeding up the approval process for rate filings and letting insurers factor reinsurance costs into their rate indications.

“Without pricing enhancements, Allstate will remain closed to new business and will evaluate additional nonrenewals or the full withdrawal of property lines from the California market,” Schoolman said. (INSURANCE JOURNAL)

FL Report Omits Claims Litigation as Cause of Insurer Insolvencies

The 2022 Annual Report posted by the Florida Department of Financial Services’ Division of Rehabilitation and Liquidation in April identified 7 factors that contributed to the insolvency of 10 insurers in the state since early 2021. They include inadequate capitalization, improper management, natural disasters and reinsurance issues.

What wasn’t on the list was claims litigation, a glaring omission to south Florida plaintiff’s attorney Gina Clausen Lozier.

“That’s ridiculous,” she said. “You’d think with all the concerns about litigation in the last few years that would be number one on the list.” (INSURANCE JOURNAL)

—Compiled by SNCJ Managing Editor KOREY CLARK

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