Risks – Page 3 – [BonkNote]

Crisis in Confidence Terri Vaughan, NAIC CEO/ Iowa (p25) – One of my colleagues likes to say the greatest risk we have right now is a crisis of confidence. — It is that people are scared. — We know our policyholders are scared. Gary Ackerman (D-NY) We cannot address or we certainly cannot legislate the…

Risks – Index ABCDEFGHIJKLMNOPQRSTUVWXYZ# A AIG – Systemic Risk ALM – Asset Liability Matching Assets Back to top B Bailouts Banks – Risks Bank-like Best Interest Standards Back to top C CDS Spreads Contagion Core Business Covered Agreements Credit Risk Crisis Crisis in Confidence Back to top D Deceptive Derivatives Disintermediation Back to top E…

Runnable Run Disintermediation Surrender We define “runnables” as “pay-on-demand” transactions which embed defaultable promises made by private agents or state and local governments without explicit insurance from the federal government. 2015 0903 – FRB – The Runnables – [link] A life insurance policy is not indentured servitude. 2014 0310 – Letter – Sheila C. Bair…

Contagion Run – Index 1994 – FRB / AP – Announcements of Asset-Quality Problems and Contagion Effects in the Life Insurance Industry, Journal of Financial Economics, Vol. 35, No. 2 – 29p 2014 1218 – LC – 15-cv-45 – MetLife v FSOC – re: MetLife – D85-2, 85-2 – Explanation of the Basis of the Financial…

Shadow Shadow Banking Shadow Insurance Recently I have noticed other disturbing signs, indicated by an increase in formation of overseas domiciled subsidiary or “Shadow Insurers” designed for use in the U.S. surplus markets. These “Shadows” of prominent U.S. insurers are popping up all over the world and are beginning to mark the escape of U.S.…

Guaranty Funds NAIC – Financial Condition Committee – (E) — [BonkNote] Guaranty Fund Issues Working Group – (E) – NAIC — [BonkNote] NCIGF – National Conference of Insurance Guaranty Funds – ncigf.org/ — [BonkNote] NOLHGA – National Organization of Life and Health Insurance Guaranty Associations — [BonkNote] (p515) – The working group identified several issues relevant…

GICs – Guaranteed Investment Contracts FABN – Funding Agreement-Backed Note GICS – AIG – FCIC GIA’s Guaranteed Interest Contracts Stable Value Unallocated Annuity Contracts 412(i) 1991 0903 – NYT – Worry Over Retirement Funds, By Eric N. Berg – [link] GIC’s, Executive Life, Mutual Benefit Also, you had a lot of different interests in Executive Life.…

Policyholder Options Many insurance contracts offer the policyowner options regarding premium payment, benefit patterns, and policy loans. This flexibility means that many different patterns of future cash flow could arise under the contract. (p6) 2002 09 – AAA – Fair Valuation of Insurance Liabilities: Principles and Method, American Academy of Actuaries – 48p The ACLI’s Dolan…

Liquidity vs Solvency Liquidity is a separate problem from solvency, but it can be equally serious. 1992 01 – SOA – The Actuary – A Possible Source of Low-cost Liquidity, by Irwin T. Vanderhoof, Society of Actuaries (p3) – 20p 2009 0305 – GOV (House) – Perspectives on Systemic Risk [PDF-254p, VIDEO-youtube-Part 1of 2 – Bad Copies] – <mp3,…

Holding Company Bank Holding Company Act of 1956 MHC – Mutual Holding Company Orderly Resolution Authority SLHC – Savings and Loan Holding Company 2007 0611 – OTS – Office of Thrift Supervison Holding Company Report Of Examination of AIG – 52p 2010 0318 – GOV (House) – Insurance Holding Company Supervision – Paul Kanjorski (D-PA) Dots –…