Merrill Lynch

  • LTCM – Long Term Capital Management
  • Monarch
  • Money Market Funds
  • CDO's - 2008
    • 2010 0304 - FCIC - Notes from Michael Lewis Interview on the topic of the Origins of CDOs markets in Nonbanks - 1p
      • The Merrill Lynch CDO machine was bigger, and produced CDOs of vastly inferior quality, to those of the other banks.
  • Jeffrey Edwards, CFO
  • Stan O’Neal, CEO 
  • Donald Regan
    • 1946-1980 - Merrill Lynch
      • 1971-1980 - Chairman and CEO
    • 1981 to 1985 - United States Secretary of the Treasury 
    • 1985 to 1987 - White House Chief of Staff 
    • 2003 0611 - The Washington Post - Donald Regan Dies - [link]
      • "Wall Street is hiding behind a protective pricing system while it preaches free competition and free markets," he said in a 1970 speech. "That is like catching Carrie Nation [the Prohibition advocate] tippling in the basement."
  • When the product was launched, SEC ruled that one was allowed to illustrate a variable life product assuming a growth rate of only 8 percent in the underlying funds.
    • The resulting cash values were not much better than the old participating product.
  • When Monarch Life filed their prospectus, they managed to persuade the SEC that 8 percent was out of date and that 12 percent should be used.
  • Everybody used 12 percent, and the resulting variable product values were much better than those under the traditional participating product.
  • Should a little company go after a big investment name?
    • Monarch has done well with the Merrill Lynch name.

--  Michael R. Tuohy

1985 - SOA - Variable Universal Life Insurance, Society of Actuaries - 22p

  • 2013 1021 - New York Securities Blog - Merrill Lynch Loses a $1.2 Million Arbitration Award Regarding the Sale of a Variable Universal Life Insurance Product – The Merrill Lynch Funds Estate Investor II, By Lax & Neville LLP - [link]
  • I work in the private client division at Merrill-Lynch.
  • How have we done during the past few years? Well, this year we expect to sell more than $2 billion in annuity products, and we expect to sell $50 million in annual premium life insurance: traditional life insurance, whole life, universal life, survivorship. This volume ranks us as one of the largest life insurance agencies in the U.S. We also have our own "private label" (if you will) life insurance company, which sells variable products as well as SPDAS. And we now rank as the 26th largest life insurance company in the U.S. by assets ($12 billion). So we have many clients who have bought insurance from us.
  • I'm going to speak about issues concerning traditional annual-premium life insurance or "universal life," not single premium whole life or "investment style" life insurance that you may associate with stock brokerage distribution.
  • Our real question then is, what will the long-term projected return be of these life insurance policies sold and of
    those sold in the past few years?

    • Obviously, you don't need me to tell you that policies sold in the 1980s will be less valuable. In other words, from a customer's perspective, they're going to cost more.
    • That's the bottom line for all these reasons.

--  John C.R. Hele

1993 - SOA - Impact of Low Interest Rate, Society of Actuaries - 32p

  • MR. CHAPMAN:  My understanding is that Merrill Lynch is waiting for a private letter ruling on something that challenges the issue more dramatically.
    • They are issuing a Universal Life policy with a variable death benefit tied to a number of separate accounts, each of which is managed by Merrill Lynch.
    • It is a case of having, on the one hand, a variable benefit tied to a separate account and, on the other hand, an additional amount of term insurance - a combination of Universal Life and variable life.
    • That private letter ruling will be informatlve.
  • WALTER N. MILLER:  I have three comments.
    • The first is on the Merrill Lynch product.
    • As some of us read their prospectus, it is not a Universal Life product. It is rather something akin to the Equitable design of a variable life policy as proposed originally by Harry Walker in his discussion of our 1969 paper.
    • This sort of variable life design has received some solid tax rulings.
    • 79-87 is one of them from the policyowner standpoint.
    • What happens with the Merrill Lynch ruling request may have little to do with the ultimate outcome of Universal Life.

1981 - SOA - The Future of Permanent Life Insurance (rsa81v7n12), Society of Actuaries - 22p