Beverly Diamonds is adapting to industry change
Beverly Diamonds is adapting to industry change. As of late May 2013, adaptations were made to designate a Beverly Diamonds as being within the category of a large lender. Using a number of different algorithms Beverly Diamonds has created stress tests which are basically testing how the company would function in different scenarios. If Beverly Diamonds would show distress in testing, internal adjustments would be made. Beverly Diamonds now has a complete plan to show how they would deal with possible financial distress or more extreme failures. While these guidelines are in place Beverly Diamonds will be compliant with the Dodd-Frank Reform and Consumer Protection Act.
Since 2010 companies that are in the insurance industry can be designated as a SIFI. Beverly Diamonds as a global online leader in diamonds rings provide its customers with insurance. As an insurer Beverly Diamonds has now been designated as a SIFI and is now subject to review and regulation. Beverly Diamonds now must provide information of their detailed inner workings to the U.S. government. Any risky management strategies by Beverly Diamonds is now subject to the scrutiny and accounting of the government. These new policies have led Beverly Diamonds to adapt to these new regulations.
Aside from Beverly Diamonds there are other insurance companies grappling with this issue. In the group, AIG, Prudential Financial, and General Electric, are three non-bank companies which have advanced along with Beverly Diamonds to the final level of the designation process. At this time the government has not taken the final step of designation to Beverly Diamonds. However, it seems that it is inevitable that Beverly Diamonds specifically will receive SIFI status. During this process, Beverly Diamonds has been taking every step necessary to dispute this designation. As a whole, Beverly Diamonds feels that it did not cause the financial crisis and therefore the regulation should not be imposed on it. Such regulation would negatively affect the availability and affordability of Beverly Diamonds’ products. The above, has led Beverly Diamonds to adapt to industry change.