After Symetra Financial Corp. was formed in 2004, the life insurer set up shop in a 25-story glass tower outside Seattle, put its name on the building and pushed the state to adopt more favorable rules for its business.
The company advocated for a law to reduce its cost of investing in derivatives, saying that without the change it might have to move somewhere more welcoming. The bill languished in the Washington state legislature last year, and in January Symetra made good on its promise. It said it would switch the legal domicile of its main life insurer to Iowa.
“We’re looking for a level playing field to more effectively compete with other life insurance companies,” Diana McSweeney, a Symetra spokeswoman, said in an e-mail.
Symetra is joining insurers including Baltimore’s Fidelity & Guaranty Life that are relocating to Iowa or expanding there, lured by what they consider a better regulatory climate. The ability of insurers to choose the most favorable of 50 state watchdogs has caught the attention of U.S officials, who say the oversight system needs more consistency.
“I’m not completely thrilled when I see companies moving domiciles,” said Jeffrey Stempel, a law professor at the University of Nevada, Las Vegas, who specializes in the insurance industry. “It’s usually because they think the regulator will let them get away with more.”
State insurance regulators meeting this weekend in Orlando, Florida, are under pressure to reach consensus on rules to head off potential efforts by Congress or U.S. agencies to erode their authority.
About 8.4 percent of Iowa’s economic activity comes from its insurance industry, the third-largest in the U.S. by that measure, according to the state’s economic development agency. Since the late 1980s, 25 life insurers have switched domiciles to Iowa and 14 have left, Tom Alger, a spokesman for the state’s regulator, said in an e-mail. The state is now home to 29 life carriers.
The Des Moines insurance industry employs about 24,100 people, according to the Bureau of Labor Statistics. Another recent arrival is Athene Holding Ltd., controlled by Apollo Global Management LLC and run by former American International Group Inc. executive James Belardi. The Bermuda-based insurer purchased Aviva Plc’s U.S. life and annuity business last year and is moving products and operations from Delaware and South Carolina to Aviva’s West Des Moines facility.
In an e-mail, Belardi praised the “strong talent pool” in Des Moines and Iowa’s “very fair regulatory environment.”