Insurers and reinsurers will not likely see a direct impact from Standard & Poor's recent downgrade of U.S. long-term sovereign debt, experts say, but the underlying economic conditions that led to the downgrade could cause some of the same issues experienced in 2008 to re-emerge.
Insurance Information Institute President Robert P. Hartwig says the downgrade has no impact on the solvency of insurers or their claims-paying ability. He notes that U.S. Treasury accounts for 6 percent of invested assets, making it a minor position in the overall financial picture for insurers.
Hartwig also says the National Association of Insurance Commissioners (NAIC) issued a statement saying there would be no impact on insurers' investments and that risk-based capital and asset-valuation reserves would be unaffected. He explains that this means insurers do not have to worry about putting up more cash for reserves.
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