Best Practices: Relationships with Insurance Company LPs

Best Practices for Relationships with Insurance Company Limited Partners

Insurance companies are an important and unique type of limited partner investor.  Their beneficiaries rely on the companies’ ability to manage large pools of capital so that claims may be paid out seamlessly at critical times in their lifecycles. Private equity investment is a crucial allocation within the insurer’s portfolio allocation, and these investors rely on PE to produce the necessary returns and diversification to serve their stakeholders.  Given the nature of their business, insurance companies also face regulation and reporting requirements that impact their operations.

In 2019, the ILPA Insurance Network, a subset of the ILPA membership that comprises limited partners investing on behalf of insurance companies, developed guidance which provides considerations for General Partners who wish to improve their engagement with US-based Insurance LPs.  The guidance focuses on disclosures and reporting requirements, ownership and control provisions, partnership structures and tax issues.

We encourage appropriate stakeholders to use this guidance as a road map to set mutual expectations when entering into a private equity partnership.  It is to be used as a companion and in conjunction with ILPA Principles 3.0, which was published in June 2019.

Questions or comments regarding the guidance can be directed to principles@ilpa.org.