• (p258) - Statement of Tom Sutton, Chairman and Chief Executive Officer of Pacific Mutual Life Insurance Co., On Behalf of the Council of Life Insurance (ACLI)
  • We have already seen the effects of underpriced products in the market place, where Executive Life was taking away the business of more prudently managed companies by illustrating or guaranteeing unrealistic interest rates.
  • One current example is that Pacific Mutual was one of the losing bidders on the Pacific Lumber annuity case that you just heard about.
  • Regarding Executive Life's strategy, Pacific Mutual and others in the industry have had a high level of concern which was dismissed by some regulators at that time as competitive sour grapes.
  • Second, Executive Life, together with others in the Milken daisy chain, had substantial lobbying power in Sacramento.
    • For example, last year I testified in favor of a legislative limit on below investment grade securities before the California assembly insurance and finance committee.
    • Intense lobbying by those opposed to such a limit led to only 4 affirmative votes out of a committee of more than 20.
  • Could we have done more at the time?
    • Perhaps, but the combination of financial euphoria and political clout would have made success extremely difficult.

1991 0227, 0507, 0509 and 0523 - GOV (House) - Insurance Company Solvency, (CSPAN) Insurance Company Insolvencies, Cardiss Collins (D-IL)  ---  [BonkNote]