Life Insurers’ Private-Credit Investments Face Regulatory Storm

US life insurers have increasingly transferred long-term policy liabilities to offshore or affiliated reinsurers in jurisdictions such as Bermuda, seeking higher returns and capital relief. They then allocate premiums to less liquid private-credit assets with opaque valuations. About $2 trillion in liabilities has moved off the original insurers’ balance sheets, affecting retirement annuities and claims-paying capacity while extending risks to the banks providing financing.

A June 22, 2026 report said nearly one-third of the US insurance industry’s roughly $5.6 trillion in assets, or about $2 trillion, had moved into offshore and off-balance-sheet structures. The National Association of Insurance Commissioners adopted Actuarial Guideline 55 in August 2025, with the measure taking effect at the end of that year. It requires asset-adequacy testing for asset-intensive reinsurance and advances stress testing of insurers’ and private-equity parent companies’ capital under adverse market conditions.