Posted on April 23, 2021

Significant Opportunity for Life Insurance Industry to Invest in Municipal Infrastructure Projects

WASHINGTON, D.C. – Senate legislation creating new “American Infrastructure Bonds” to help municipalities fund important infrastructure projects was endorsed this week by the Insured Retirement Institute (IRI).

"The measure will offer the life insurance industry, one of the nation's most prominent institutional investors with nearly $7 trillion invested, an opportunity to invest its capital in financing infrastructure projects and help to revitalize and strengthen our nation's economy," said Paul Richman, IRI Chief Government and Political Affairs Officer.

IRI expressed its support for the bipartisan American Infrastructure Bonds Act of 2021 in a letter to the bill sponsors, U.S. Senators Roger Wicker (R-Miss.) and Michael Bennet (D-Colo.) The bill is co-sponsored by Senators Roy Blunt (R-Mo.), Debbie Stabenow (D-Mich.), Shelley Moore Capito (R-W.Va.), Tim Kaine (D-Va.), and Cynthia Lummis (R-Wyo.).

Infrastructure investments generate predictable revenue, provide better returns, and reduce reinvestment risk for the life insurance industry, allowing for deployment of investment capital to long-term, highly illiquid assets.

More than a decade ago, when the life insurance industry had an opportunity to invest in federal infrastructure bonds, it purchased $60 billion or 33 percent of "Build America Bonds" established in the American Recovery and Reinvestment Act. As a result, the life insurance industry provided capital to finance projects in all fifty states, the District of Columbia, and two U.S. territories.

"Advocating for an innovative infrastructure financing mechanism is among IRI's priority issues included in our 2021 Federal Retirement Security Blueprint," Richman said. "We are encouraged to see the American Infrastructure Bonds Act of 2021 introduced, and we welcome the opportunity to work with the sponsors to advance this legislation."

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Contact: Dan Zielinski