Life Insurance Company Investment Portfolio Composition and Investment Regulation

Has the investment portfolio composition of life insurance companies shifted over time? Does regulation impose a binding constraint on portfolio investments? Data for 55 life insurance companies (stock, mutual, and fraternals) has been analyzed to answer these questions. The study concludes that for bonds and real estate, the investment percentage has not changed significantly over time. However, for stock, mortgages and "other" assets, the change has been significant. Of note, there has been a substantial increase in the use of the "other" asset account. Regulations focusing on permissible investment percentages do not seem to have imposed a binding constraint.