New Jersey insurance regulators are conducting a comprehensive exam of Prudential Financial Inc. as part of a new type of state supervisory role over the company, a Prudential executive said in a presentation to investors on Tuesday.
The state is in the midst of the regulatory exam, launched as part of New Jersey's role as the company's "group supervisor," a new type of authority for the state, which in recent years has been working in tandem with U.S. federal regulators who oversee a handful of large insurance companies, including Prudential.
State insurance regulators frequently examine the businesses and finances of insurers under their purview. The examination at issue is not a criminal probe, nor is it alleged that Prudential has engaged in wrongdoing.
The supervisory role for New Jersey is in its "formative stages," said Vice Chairman Mark Grier.
He did not elaborate on New Jersey's "new authority."
A spokesman for the New Jersey Department of Banking and Insurance could not be immediately reached for comment.
Shares of Prudential were down about 1.8 percent at $103.66 in early trade on the New York Stock Exchange.
Prudential and American International Group Inc are the two U.S. insurance companies deemed by the government as being a "systematically important financial institution," meaning that it could devastate the financial system if it failed. The label triggers stricter capital requirements and oversight from the U.S. Federal Reserve.
The process of imposing the designation has drawn ire from some U.S. Republican lawmakers, who said it lacks transparency and consistency, among other concerns.
The U.S. Financial Stability Oversight Council determines whether companies can be designated as systematically important financial institutions, or "SIFIs."
This article was provided by Reuters.