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Insurers use alternative paths for risky structured debt as regulators shift focus
The report says state insurance regulators took four years to restrict one structured debt type, during which insurers increased exposure to other structured forms.
Insurers have been finding workarounds to keep investing in risky structured debt as regulators address specific products one at a time, according to a Markets report by The Wall Street Journal.
The outlet said it took state insurance commissioners about four years to clamp down on one category of structured debt, while insurers continued moving into other, similarly risky variations.
The broader point, as described by The Wall Street Journal, is that enforcement can resemble a whac-a-mole process, with insurers adapting as regulators target particular flavors of structured credit.