2008 Financial Crisis - ACLI
- 2008 1101 - ThinkAdvisor - Smoke and Mirrors?, By Marlene Y. Satter - [link]
- When ACLI and AIA issued their statements pushing for federal oversight, NAIC accused them of playing politics, reiterating that the state-regulated insurance companies that were part of AIG were sound and “are not the problem.”
- Further, NAIC explained that “the problem lies with the AIG financial holding company that is subject to federal regulatory oversight by the U.S. Office of Thrift Supervision (OTS).”
- That holding company, it continued, “took on more risk than they [sic] could handle” and invested in non-state-regulated collateralized debt instruments that included mortgage-backed securities and credit derivative swaps.
- When the housing market went south, it took these investments with it.
- ACLI Statement - <WishList> - programbusiness.com/news/acli-to-treasury-include-optional-federal-charter-for-life-insurers-in-regulatory-reform/
- AIA Statement - <WishList>
- 2008 1125 - Reuters - Life Insurers Seek Aid to Stabilize Investments, By Lilla Zuill - [link]
- Life insurers had more than $1.8 trillion invested in corporate bonds, $462 billion in government bonds, $302 billion in commercial mortgage investments and $20 billion in real estate holdings at the end of 2007, according to the American Council of Life Insurers (ACLI).
- “Life insurers are the number one purchasers of corporate bonds,” said Jack Dolan, an ACLI spokesman. “They grease the wheels for financing corporate America. In essence, they are the wholesalers of credit, while banks are the retailers,” he said.
- The insurers are susceptible to the credit crisis through their investment portfolios, real estate holdings, and higher costs for reserves and hedging related to investment-linked retirement products they sell.
- Federal support for life insurers would “provide a level of confidence to return to investment activities,” said the ACLI’s Dolan.