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DOL's final rule includes some concessions; bleak outlook for energy insurers continues

Inthe news

In a fact sheet shared ahead of the fiduciary rule's officialrelease, the federal government pledged that its fiduciary rule would "ensureretirement savers get advice in their best interest, while minimizing thecompliance burden on many advisers who already put their clients' best interestfirst."

The retirement industry has to adopt the broaderfiduciary definition by April 2017 but it can take advantage of the rule's BestInterest Contract exemption by meeting certain "limited" conditions.The entire package of regulations will then go into effect on Jan. 1, 2018.That represents a more relaxed timeline than the federal government's originalplan to implement the entire fiduciary rule within just eight months of itsrelease, in what the White House characterized as a concession to concerns overcompanies' ability to handle the compliance burden.

Media outlets noted that the Department of Labormoderated its stance on some issues. As the timeline for the compliance hasbeen extended beyond the end of the current administration, opponents of therule could see an opportunity to further water down the requirements or evenend the rule under the new administration, TheWall Street Journal reported.

In related news, a full audience for a Life Insurance Conferencepanel in Las Vegas dedicated to the new standard's implications for retirementplanners and the wider investment advice industry.

Providers of variable annuities such as ,Lincoln National Corp.,MetLife Inc. andPrudential FinancialInc., are among the companies that are likely to be affected by therule, according to The Wall StreetJournal's MoneyBeat.

WillisTowers Watson Plc warned in its latest EnergyMarket Review posted on ActuarialPost that the outlook for energy insurers remains bleak as ample capacityfor energy insurance and continuous drop of rates could lead to someunderwriters scaling back or pulling out of the energy market. The report notedthat capacity has increased in both the upstream and downstream insurancemarkets for the tenth year in a row, but demand continues to be a challengeafter energy companies' risk management budgets were hit by cost-cuttingmeasures following the oil price collapse.

The NAIC is seeking to fast-track a , but the insuranceindustry is pushing back on the timing and the content of the proposal.

Cybersecurity Task Force Chair Adam Hamm said theeffort to develop a model on the issue of cybersecurity would be a marathon,not a sprint. Hamm would, however, like to see this race run as quickly aspossible "without pulling a hamstring" and see the model law become astate accreditation standard.

A number of entities have expressedinterest in acquiring 100% of American International Group Inc.'s , The Insurance Insider reported. A fullsale would likely fetch a higher valuation and more rapid liquidity, accordingto the report.

West Chester, Pa.-based independent agency ElementRisk Management acquired Pittsburgh-based independent agency BarnettInsurance Inc., the Insurance Journalreported.

Fairview Health Services signed a to combine with UCare.

The WSJ carrieda report that discussed MetLife's attemptto remove itself from the Federal Reserve's supervision back in August 2008.The insurer applied to change the nature of its banking charter, which wouldput it under the regulation of the Office of Thrift Supervision. However, theapplication was withdrawn in 2009 as U.S. policymakers were looking intoshutting down the office.

Moody's said its rated U.S. life insurers saw a 4%growth in total statutory capital and surplus in the 2015 fiscal year. The U.S.insurers also recorded increases in the median NAIC risk-based capital ratio.However, the rating agency expects capital levels to remain unchanged in 2016as macroeconomic headwinds such as volatile equity markets, continuing lowinterest rates, low oil and commodity prices and the strengthening U.S. dollarlimit further improvement.

U.S. commercial P&C insurance composite ratefell 3% on average inMarch, compared to a 4% decline in February, according to MarketScout. Personal linescomposite rate in March was flat.

The Atlantichurricane activity in 2016 is still expected to be slightly below-norm,according to the Tropical Storm Risk. Based on current and projected climatesignals, Atlantic basin tropical cyclone activity is projected to be about 20%below the 1950-2015 long-term norm and about 15% below the recent 2006-201510-year norm.

The Colorado Legislature will consider a billthat proposes to make large companies that do not offer health insurance andpay their employees less than $12 an hour pay the state to subsidize the costfor their workers to receive Medicaid benefits, the Denver Business Journal reported.

Inother parts of the world

China's AnbangInsurance Group Co. signed an agreement with to acquire the entirestake in the German insurer's South Korean insurance and asset managementbusinesses, South Korea's The Chosun Ilboreported.

The cost of mis-selling payment protection insurance hascost U.K. banks dear.But the worst may be yet to come.

ICICI LombardGeneral Insurance Co. Ltd. will soon launch insurance products forstartups, The Economic Times reported,citing Birendra Mohanty, vice president of the insurer's small and medium-sizedenterprises and broking division.

Theday ahead

Early morning futures indicators pointed to a higheropening for the U.S. market.

In Asia, the Hang Seng was up 0.15% to 20,206.67. TheNikkei 225 fell 0.11% to 15,715.36.

In Europe as of midday, the FTSE 100 rose 0.48% to6,120.70, and the Euronext 100 climbed 0.34% to 843.12.

Onthe macro front

The Gallup U.S. job creation index, the EIA petroleumstatus report and the FOMC minutes are due out today.