Risks

Bank-Like The regulation provides for the pre-funding of cash values, so that the amounts will be available upon policyholder demand, and will not be contingent upon sufficient surplus being available at that time to cover what is the equivalent to a demand deposit. The regulation relies heavily on the NAIC Universal Life Insurance Model Regulation…

Macroprudential versus Microprudential Regulation Common Exposures Contagion Liquidity modeling Mass lapses macroprudential surveillance Systemic amplifiers Triggers NAIC Liquidity Stress Testing (LST) Framework NAIC MACROPRUDENTIAL INITIATIVE (MPI) – [link] Macroprudential Task Force (MPTF) of the American Academy of Actuaries Common Exposures 269 For instance, in 1991 six major life insurers, each with over $4 billion in…

Interconnectedness MGIC, for instance, which Baldwin bought for $1.l7 billion, had $380 million in real estate and other assets which Baldwin sold to raise cash for the purchase. But instead of selling only to outsiders, Baldwin has sold some of its assets, including stock of its own operating companies, to its own insurance companies. ”Some…

Assets https://www.acli.com/-/media/ACLI/Files/Fact-Books-Public/02FB19FChap2Assets.ashx?la=en#:~:text=Life%20insurer%20holdings%20of%20corporate,(Table%202.1%2D2.2). https://fred.stlouisfed.org/release/tables?rid=52&eid=804724#snid=804747

Investment-Oriented Products In contrast, many of the investment-oriented products marketed in the last decade have shorter duration and require greater liquidity than was needed in earlier … 1992 – World Bank – The Life Insurance Industry in the United States: An Analysis of Economic and Regulatory Issues, by Kenneth M. Wright – 54p 1987 – SOA -…

ACLI – Systemic Risk 2009 – 2009 1026 – InsuranceNewsNet – Relieved to Have Survived a Dangerous Year, ACLI Members Look Ahead, By Ron Panko, senior associate editor, Best’s Review – [link] The year certainly tested the ACLI leadership. Frank Keating, its president and CEO, related the many actions he and his team took to…

Derivatives Derivatives, Options, Swaps etc – Government Hearings Commodity Futures Modernization of 2000 1984 – SOA – Options and Futures — A Teaching Session, Society of Actuaries – 26p 1994 0518 – GAO – Financial Derivatives: Actions Needed to Protect the Financial System – GGD-94-133 – 200p 1994 – SOA – NAIC Model Investment Law…

FSOC – Prudential 2013 0909 – FSOC/Prudential – Resolution Approving Final Deterministation Regarding Prudential Financial Inc. (Woodall, Huff, Edward J. DeMarco, Acting Director, Federal Housing Finance Agency) – The Chair of the Securities and Exchange Commission recused herself from the vote. – 23p FSOC – Prudential – Determination and Dissents – [BonkNote] 2013 0919 -…

FSOC – MetLife Designation MetLife v FSOC – Legal Case Run – Implausible – LIRP – Reputational Risk / Future Shock 2007 – IAA (International Actuarial Association) – Measurement of Liabilities for Insurance Contracts: Current Estimates and Risk Margins, IAA ad hoc Risk Margin Working Group – 170p (p156) – E6.2.3 – The following are some considerations…

Insolvencies Failures In the early 1990s, there were a number of large insolvencies — Willis B. Howard Jr., NOLHGA – National Organization of Life and Health Insurance Guaranty Associations 1998 – SOA – Once in a Hundred Years, Society of Actuaries – 22p 1991 0427 – Los Angeles Times – State Allegedly Knew Executive Life Was…

Bank-like

Macroprudential

Interconnected

Assets

Investment-Oriented Products

ACLI – American Council of Life Insurers – Systemic Risk

Derivatives

FSOC – Prudential Insurance Company

FSOC – MetLife

Insolvencies