The National Association of Insurance Commissioners defended its supervision of Wall Street's influence over insurers and their bets on private credit, as the group seeks to dispel US senator Elizabeth Warren's doubts about potential regulatory gaps.

In a letter in response to Ms Warren’s questions, the NAIC defended the efficiency of the state-led regulatory framework, detailing at length some of its recent or upcoming actions to improve oversight of life insurers’ investments and solvency.

The changes include the adoption of a more refined definition for bonds and the NAIC's ability to challenge private ratings when it deems it necessary, as well as increased transparency and reporting requirements -- particularly for private investments.

“The continuing modernisation of these tools does not reflect an insurance regulatory vacuum requiring enhanced federal guardrails,” the NAIC, led by Virginia insurance Commissioner Scott White, wrote in the letter. “Rather, it reflects the state-based system performing its longstanding function of adapting prudential standards as markets evolve.”

Concerns over the efficiency of the US insurance regulatory system have intensified after revelations that insurers controlled by Guggenheim Partners chief executive officer Mark Walter are the subject of a federal probe. The firms disclosed that more than $20 billion of loans on their balance sheets should have been labelled as affiliated but were not.

The development prompted Ms Warren to publicly express concerns that the current regulatory framework may not be keeping pace with evolving risks posed by the industry’s increasing ties to private credit.

On Wednesday, Apollo Global Management chief executive officer Marc Rowan, an architect of Wall Street's makeover of the life-insurance industry, added his voice to the chorus. Apollo is the parent company of Athene, the largest seller of annuities in the US, which has a life reinsurance company in Bermuda.

Singling out Delaware regulators for failing to catch Walter’s insurers’ misclassifications, Mr Rowan criticised the broader regulatory system, which relies on a fragmented approach that varies by state.

He warned against the temptation for regulators to attract insurers to their states by loosening rules designed to ensure their stability and solvency. That creates the potential for arbitrage, he said, and threatens to weaken the entire industry.

In the letter, the NAIC declined to say whether specific actions were taken regarding Delaware Life Insurance Co and Clear Spring Life and Annuity Co - the insurers being probed by prosecutors - and referred questions to the Delaware Department of Insurance.

Still, the group said it is not aware of any private company investing policyholder premiums in risky instruments or failing to disclose such investments appropriately.