Life insurers have asked state regulators to loosen standards linked to souring residential mortgage investments as capital requirements surge.

The insurers are faced with "a major issue," the American Council of Life Insurers said in a proposal dated Sept. 10 and posted on the Web site of the National Association of Insurance Commissioners. The capital that carriers must hold against the slumping assets jumped fivefold to $11 billion in the six months ended June 30, according to the council.

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