Feb. 27 (Bloomberg) — Prudential Financial Inc., the second-largest U.S. life insurer, said the New York Department of Financial Services told the company that it may not be holding enough reserves to back some savings products, known as variable annuities.
The regulator "notified us that it does not agree with our calculation of statutory reserves," Newark, New Jersey-based Prudential said today in a filing with the Securities and Exchange Commission. "We are currently in discussions with the NYDFS regarding the proper level of statutory reserves."
The New York regulator, led by Benjamin M. Lawsky, has been scrutinizing insurers' reserves to make sure the companies have enough funds to meet future payouts. Lawsky called for tighter rules for some products and proposed a moratorium on the use of transactions by insurers with affiliated companies that can mask risk.
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