b'TABLE OF CONTENTSMr. Kolchinsky suggested that one of the NAICs modelon February 1, 2022, the MWG made some actsthe Insurance Holding Company System Regulatoryrevisions to the document based on comments Act (Model Act)be amended to add the followingreceived and voted to adopt the revised document definition of Financial Entity Owned Insurer: and send it up the ladder to the FS TF. The FS TF adopted this revised document without any Financial Entity Owned Insurer is a regulatedchanges on February 22, 2022.insurer, which is controlled by or has a long-term investment management agreement with anAs adopted by the FS TF, the document outlines entity, which: (1) derives the majority of its13 regulatory considerations, which are stated to revenue through the management of orbe applicable (but not exclusive) to PE-owned investment in financial assets, (2) is not itself ainsurers. These considerations may be regulated insurer, and (3) has some minimumsummarized as follows:amount of assets under management (AUM). 1.Regulators may not be obtaining clear pictures of risk due to holding companies structuring Mr. Kolchinsky also suggested that the definition ofcontractual agreements in a manner to avoid affiliate in the Model Act be amended to includeregulatory disclosures and requirements. entities managed by an affiliate of a Financial EntityAdditionally, affiliated/related party agreements Owned Insurer, and that such insurers be requiredimpacting the insurers risks may be structured to disclose the following:to avoid disclosure (for example, by not including fees paid or accrued to first degreethe insurer as a party to the agreement).affiliates and second degree affiliates; 2.Although the Model Act includes a presumption AUM of all affiliates; and of control based on 10% or greater ownership of voting securities, control and conflict of interest investments where there are otherconsiderations may exist even where there is relationships with first degree affiliatesownership below that level. For example, and second degree affiliates. control may be exercised through board and management representation or contractual Development of Newarrangements, including non-customary Regulatory Considerations minority shareholder rights or covenants, provisions in investment management The FS TF delegated responsibility for consideringagreements such as onerous or costly issues raised by PE ownership of insurers to itstermination provisions, or excessive control or Macroprudential (E) Working Group (MWG). Ondiscretion given over the investment strategy December 7, 2021, the MWG exposed for commentand its implementation.an initial draft list of regulatory considerations applicable to PE-owned insurers, for a comment3.The material terms of an investment period ending on January 18, 2022. At its meetingmanagement agreement and whether they MAYER BROWN |73'