NEW YORK, June 10 (Reuters) - Private credit helps insurance

companies generate the money they need to make payments, and

increased attention from regulators will ultimately help the

industry, the chief executive of private capital firm Ares

said on Wednesday.

"Insurance companies need private credit," Michael Arougheti

told the Morgan Stanley US Financials conference in New York.

"When we look at the requirement to generate excess return,

and you look at the current size of the traded markets, in order

for them to meet the objectives of their policyholders, they

rely on private credit," he added.

U.S. life and annuity insurers' private credit holdings more

than doubled over the last 10 years while official interest

rates were historically low, according to ratings company and

insurance industry specialist AM Best.

U.S. Treasury secretary Scott Bessent has consulted with

state insurance commissioners to improve oversight amid concerns

about transparency, lending discipline, and a pullback among

wealthy individuals from funds that gave them access to the

rarely traded asset class.

"Regulation does not mean bad," Arougheti said. "As (the)

insurance industry continues to lean into private markets

investing, the regulator is going to want more transparency into

structures and performance, which is absolutely appropriate,"

Arougheti said.