Run - Examples

  • The events of 1980 when policy loans, surrenders, the shortfall of pension inflows, and scattered withdrawals of employee benefit funds forced sizeable borrowings and even some asset liquidations to meet the drain are not necessarily a unique set of circumstances.

1983-2, NAIC Proceedings

  • 2008 - Financial Times - AIG - Asia
  • Eric Dinallo - Long-Term Run - Happens When Nobody Buys Life Insurance
  • 198x-GOV- Agent / Belth / Pyramid
  • 199x-GOV-Executive Life- Illinois Woman, Sigerson
  • Mutual Benefit
  • Executive Life
    • ELIC
    • ELNY
  • 199x - GOV - Agent
  • 1970's/1980s
    • FTC Report
    • Media
    • BTID - Terminates - that companY
  • 1991 0511 - The Los Angeles Times - Insurance Firm Operations Cut by Garamendi, by Daniel M. Weintraub and Kathy M. Kristof - [link-BonkNote]
    • Halting what he describes as  a run on the bank," State Insurance Commissioner John Garamendi placed severe operating restrictions on First Capital Life Insurance Co. but stopped short of seizing the troubled firm. 
  • They are looking, in particular, at the Mutual Benefit and saying, “Yes, Mutual Benefit had a run on the bank.”
    • They also had illiquid assets and were not able to respond to that run.
  • There is some type of measure or factor applied in looking at the liquidity of assets, the business you’re writing, the probability of a run on the bank, or all these other factors that build, either independently or as part of the risk based capital formula, into a liquidity factor.
  • [Bonk: They = Regulators]

--  Barbara L. Snyder - General American Life

1996 - SOA - Investment under the Risk-Based Capital (RBC) and Rating Agencies Requirements, Society of Actuaries - 16p

  • Another recent marketplace phenomenon has been a sharp increase in replacement activity, with indications that perhaps half of all lapses involve replacement situations.

1982 0608 - Letter - ACLI to NAIC - Statement on Behalf of the American Council of Life Insurance to the NAIC (A) Committee's Manipulation, Lapsation, Dividend Practices and Annuity Disclosure Task Force - (p524-526)  --  1982-2, NAIC Proceedings

  • 448 Panel staff call with National Association of Insurance Commissioners (Apr. 27, 2010).
    • The NY insurance regulators have provided Executive Life of New York as an example of seizure not being automatic for solvent insurance subsidiaries upon the bankruptcy filing of the holding company but later becoming necessary; the NY insurance regulators seized Executive Life of New York insurance subsidiaries several months after the parent company bankruptcy filing because a run on the insurance subsidiaries had developed. Panel staff conversation with New York State Insurance Department (June 3, 2010)

2010 0610 - COP June Oversight Report - The AIG Rescue, Its Impact on Markets, and the Government’s Exit Strategy - 337p

  • 1991 0729 - GOV (House) - Regulation of Insurance Companies and the Role of The National Association of Insurance,  Commissioners, Ben Erdreich (D-AL)
    • [PDF-286p, VIDEO-?]
    • (p10) - Statement of Mike Weaver (Commissioner, State of Alabama) - A very recent example of that would be the Mutual Benefit situation where over $1 billion was withdrawn over a 2-week period of time.
      • There are not many insurance companies nationwide that can withstand that thrust.
      • The public has to have confidence in what is going on out there in all financial institutions, insurance being one of the major ones. 
    • ⇒ NAIC - Statement of Mike Weaver, Commissioner, State of Alabama - 8p
  • 1991 0717 and 0724 - GOV (House) - Life Insurance Solvency Issues, (CSPAN) - Insurance Insolvencies, (NAIC) - The Impact of Junk Bonds, Real Estate and Mortgages on the Life Insurance Industry - Cardiss Collins (D-IL)  ---   [BonkNote]
    • (p97) -  Lennon - And if we may, just go back and think about Mutual Benefit,  .... a lot of the contracts that surrendered, I've heard a number of a billion dollars in the last month or something like that which seems to me an extraordinary number.