• 1995-1, NAIC Proceedings - Guaranty Fund Issues Working Group B of the Insolvency (EX5) Subcommittee - September 11, 1995
  • (p588) - The first person to testify was Commissioner Dwight K. Bartlett III (Md.). Commissioner Bartlett told the working group that guaranty associations were developed during a time when "life insurers sold life insurance."
    • He cited the recent rehabilitation of Mutual Benefit Life Insurance Company as an example of the shortcomings of the present guaranty association system.
    • The receiver and guaranty associations did the best job possible within the current framework, but policyholders were forced to bear a disproportionate share of the costs involved, he said.
    • Commissioner Bartlett characterized his proposal as representing a middle ground between the current system and a system like the Federal Deposit Insurance Corporation (FDIC) advocated by some.

• (p588) - Len Stillman (Utah) asked why consumers who purchase investment type insurance products should be afforded protection that other investors are not offered.
  • Commissioner Bartlett responded that there is a perception that products offered by life insurers are more secure than other investments.

• (p589) - Ms. Pruitt said that some limitation on policy restructuring is fair, but that the working group should note that some insolvencies have been caused by insurers issuing policies containing unrealistic promises and guarantees.

<Words: "run on the bank.", 1. Moratoria on Surrenders and Withdrawals of Cash Values,