1991 0227, 0507, 0509, 0523 - GOV (Senate) - Insurance Company Solvency

  • 1991 0227, 0507, 0509 and 0523 - GOV (House) - Insurance Company Solvency, (CSPAN) Insurance Company Insolvencies, Cardiss Collins (D-IL)  ---  [BonkNote]
    • [PDF-369p-GooglePlay,  VIDEO-0509-CSPAN]  ->Not on govinfo.gov - R
    • <VIDEO-? - 0227, 0507 and 0523>
    • House - Committee on Commerce, Science, and Transportation - Subcommittee on Commerce, Consumer Protection, and Competitiveness
  • Richard Bryan (D-NV)
  • Senator Howard Metzenbaum (D-OH)
  • ACLI - Tom Sutton, Chairman and Chief Executive Officer of Pacific Mutual Life Insurance Co., On Behalf of the Council of Life Insurance
  • (p64) - ...Baldwin (originally the piano company)...
    • Statement to U. S. House of Representatives Subcommittee on Oversight and Investigations, By Karl L. Rubinstein, Special Deputy Insurance Commissioner, State of California:, September 14, 1988
  • (p122) - Howard Metzenbaum (D-OH) - I will tell you what we do need.
    • We need the insurance industry to step up to the bar, to step up to Congress, and say "Look, we know there are problems and this is what we will do or what we suggest you do.?"
    • What they are saying is, "We are running away from the problem. The industry is strong.
  • (p122) - Howard Metzenbaum (D-OH) - The industry is not that strong, and State regulation is a failure.
    • It is not working.
    • The insurance regulators-some are good but there are some exceptions.
    • The fact is that the State regulators, first of all, do not have the knowledge to do that which has to be done in connection with this industry.
    • They are not that well staffed, and they are not going to get that well staffed overnight.
    • Second, I am not sure that they have the resources to do so.
  • (p122) - Howard Metzenbaum (D-OH) - I say to you, Mr. Chairman, I believe that Congress has to deal with this problem promptly.
    • This subject has a sense of urgency about it.
    • There is no more powerful economic industry in the Nation than the insurance industry.
    • They have an impact upon the entire economy of this country, and I think that we all ought to be working together. 
  • (p270) - Richard Bryan (D-NV) - Are we likely, Mr. Sutton, to see other insurance company failures, life insurance company failures?
  • Tom SUTTON, ACLI / Pacific Mutual Life - Yes.
  • (p280) - Richard Bryan (D-NV) - Is the concept of a disclosure offensive to you, assuming that you could get a disclosure that is not so highly technical as to be actually meaningless?
    • But I mean, is the concept of full disclosure at the point of sale, assuming that you could get something that is more understandable than the complexities might permit it to be? You can be so complex that nobody is going to read it, and those that do --
  • Tom SUTTON, ACLI / Pacific Mutual Life - My personal opinion is that I would not have any problem with a kind of disclosure that could be communicated simply, but was based on extensive analysis by someone capable of making the appropriate analysis.
    • I would not like a simplistic disclosure that could cause great dislocation because it did not recognize all of the factors in what is, in fact, a very complicated business. 
  • (p258) - ACLI - Statement of Tom Sutton, Chairman and Chief Executive Officer of Pacific Mutual Life Insurance Co., On Behalf of the Council of Life Insurance
    • We have already seen the effects of underpriced products in the market place, where Executive Life was taking away the business of more prudently managed companies by illustrating or guaranteeing unrealistic interest rates.
    • One current example is that Pacific Mutual was one of the losing bidders on the Pacific Lumber annuity case that you just heard about.
    • Regarding Executive Life's strategy, Pacific Mutual and others in the industry have had a high level of concern which was dismissed by some regulators at that time as competitive sour grapes.
    • Second, Executive Life, together with others in the Milken daisy chain, had substantial lobbying power in Sacramento.
      • For example, last year I testified in favor of a legislative limit on below investment grade securities before the California assembly insurance and finance committee.
      • Intense lobbying by those opposed to such a limit led to only 4 affirmative votes out of a committee of more than 20.
    • Could we have done more at the time?
      • Perhaps, but the combination of financial euphoria and political clout would have made success extremely difficult.