Best’s Special Report: Insurers’ Funding Agreements With Federal Home Loan Banks Likely to Increase
The Best’s Special Report, titled, “Funding Agreements With Federal Home Loan Banks Likely To Increase,” states that under the proposed changes by the
FHLB’ are government-sponsored enterprises regulated by the
According to the report, L/A companies have the highest carry value of collateral pledged to FHLB’, and pledged collateral is growing for all insurance segments. Health insurers account for the highest percentage of borrowing over the last five years, followed closely by L/A insurers. Health companies are using FHLB borrowings partly for cash management needs related to the Patient Protection and Affordable Care Act. Property/casualty insurers’ borrowings have been low relative to pledged collateral because they tend to use FHLB programs more as a backstop than for active spread management, although their use of matched trades has increased.
To access the full copy of this special report, please visit http://www3.ambest.com/bestweek/purchase.asp?record_code=273363.
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