Insurance Company Solvency: Hearings Before the Committee on Commerce, Science, and Transportation, United States Senate, One Hundred Second Congress, First Session, February 27, and May 7, 9, and 23, 1991
U.S. Government Printing Office, 1991 - Bankruptcy - 317 pages
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A.M. Best accounting action additional agencies annuity assessments assets Association banks believe benefits California capital Chairman changes claims committee company's concern condition consumers continue cost cover develop effective ERISA examination Executive fact failed failure Federal firms going Government guaranty fund hearing holding important income increased insolvencies Insurance Commissioners insurance companies insurance industry interest investment issue junk bonds liabilities limits lines loans look losses major meet ment million NAIC operating past percent policyholders potential premium problems protection question real estate recent regulation regulatory reinsurance represented require reserves response result risk savings Senator BRYAN solvency standards statement surplus testimony Thank things tion weak Weiss York
Page 95 - The rates and premiums charged for insurance policies to which this act applies shall include amounts sufficient to recoup a sum equal to the amounts paid to the association by the member insurer less any amounts returned to the member insurer by the association and such rates...
Page 102 - TODAY During the last decade the life insurance industry has undergone dramatic changes. It has evolved from a mature business with stable risk elements' and generous profit margins to a business marked by instability of risk and evaporating profit margins. This has come about through a revolution In the marketplace ?recipitated by the dramatic rise in interest rates in the late 1970's and early 980 s.
Page 278 - These minimum standards establish bottom-line requirements for state solvency regulation in three key areas: (1) laws and regulations, (2) regulatory practices and procedures, and (3) organizational and personnel practices. In order to provide guidance to the states regarding the minimum standards and an incentive to put them in place, the NAIC adopted a formal certification program in June 1990. Under this plan, each state's insurance department will be reviewed by an independent review team whose...
Page 74 - I am vice president of the National Association of Insurance Commissioners and Director of Insurance for the State of Nebraska.
Page 103 - 90's" will see a significant consolidation in the industry as the problems of the "80's" are gradually managed. The following discussion covers the principal areas of risk to life insurers that have arisen during the last decade together with the regulatory response of the New York department and of the NAIC. A. ASSET RISK Some companies have sought to improve their margins by achieving higher returns from their assets, generally by assuming greater risks.
Page 23 - ... credits for the underinsured and with legal limits on medical liability costs as elements. LONG-TERM PROSPECTS The life insurance industry will go through considerable changes over the next few years. The long-term prospects for life insurance and annuity products of life insurance companies are good. Demographic variables, such as income growth, wealth accumulation, population and workforce changes, and home ownership will determine the demand for insurance products over the long term. The rate...
Page 83 - Company has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about the company's ability to continue as a going concern.
Page 103 - The typical life insurers' management structure allowed for considerable functional autonomy within the organization. For example, the investment department managed the assets without much input from either the marketing or actuarial divisions. The results of their labors were used by, but not influenced by, the other units of the company. During the eighties this situation changed; in many companies marketing...
Page 100 - ... Thus, at the outset of the final decade of the twentieth century, an industry that has flourished in this century is now struggling to redefine itself. In the past decade many life insurance companies have seen their real capital shrink. Many are being carried by the earnings derived from their old business and are not earning sufficiently on their new business to carry them into the future. The responses from life insurers to these conditions have varied. Many of them have been positive and...
Page 193 - surplus" plan assets, which it then used to pay off part of the takeover debt. Based on the recommendation of an outside consultant, illustrative bids for annuity contracts were solicited from a number of insurance companies. Executive Life was not on the list of recommended companies.