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Member, Beacon International Group, Ltd.
The new Inciso K requirements will limit Argentine insurers' liquidity and weaken their credit quality, Moody's Investors Service Inc. said.
The new rules require insurers to increase their investment allocation in infrastructure projects, BNamericas reported. Moody's said insurers will be forced to "invest in risky projects to meet their quotas, which will negatively affect capital adequacy on a risk-adjusted basis." Property/casualty insurers would have to invest 44% of their total capital and the workers' compensation segment 43% in infrastructure projects, Moody's said.