Solvency

1994 04 - CBO - The Economic Impact of a Solvency Crisis in the Insurance Industry, Congressional Budget Office  ---  [BonkNote]  ---  80p

  • Most insurers face risk and uncertainty from a source not normally covered by classical theory of risk texts. This additional element of risk is insolvency, not of your company, but that of other licensed insurers.

--  Joseph W. LEVIN, not a member of the Society, is a fellow of the Casualty Actuarial Society and Vice President and Actuary of the Employers Reinsurance Corporation. 

1978 - SOA - Capacity and Solvency -- The Outside Influence, Society of Actuaries - 20p

  • 1990 1218  - Deseret News - Life Insurance Industry Faces A&L-Type Threat, Senator Says, by Associated Press - [link]
    • The life insurance industry, which controls nearly $2 trillion, could suffer the same fate as the savings and loans, jeopardizing the financial security of millions of Americans, a senator contends.
    • Sen. Howard Metzenbaum, D-Ohio, who chairs the Senate Judiciary subcommittee on antitrust, said financially shaky insurers are able to conceal their real problems through questionable accounting gimmicks and with little policing from the states.
    • But A.M. Best Co., which operates a well-regarded system of rating insurance companies, says insurers have maintained their secure standing, especially in comparison to other financial industries.
  • II. REGULATORS' PROBLEMS
    • The development of new products and the entry into new lines of activities by financial organizations have presented regulators with serious new problems.
    • These problems have shown up in the area of protections afforded buyers of these products and most especially in the area of regulating the operations of companies with a view to solvency.

--  Dick Minck, Executive Vice-President of the American Council of Life (ACLI) Insurance and the newly elected Secretary of the Society of Actuaries

1984 - SOA - Changes in the Canadian Regulatory Framework for Life Insurance, Society of Actuaries - 36p

  • Another area of concern relating to solvency is investments by insurers.
  • Recently, some states have expressed concern over investment by life insurance companies in high yield / high risk obligations, referred to as "junk bonds."

--  John Washburn, Director of Insurance for the State of Illinois and Vice President of the NAIC

1987 0701 and 0729 and 1014 - GOV (House) - Developments In State Insurance Regulation - [PDF-511p-GooglePlay

  • Solvency Modernization (EX) Task Force - NAIC
  • 1995-3, NAIC Proceedings - ATTACHMENT TEN-D: Mission Statement For The NAIC
    • Financial Regulation Standards and Accreditation Program 
    • The NAIC's Financial Regulation Standards and Accreditation Program seeks cooperation among state officials to maintain a high level of merited confidence in solvency regulation in each state. 
  • 1976 - SOA - Solvency Standards for Life Companies in the United States, Canada, and the United Kingdom, Society of Actuaries - 36p
  • 1984 - SOA - Changes in the Canadian Regulatory Framework for Life Insurance, Society of Actuaries - 36p
  • 1991 - AP - Should the Feds Regulate Insurance Company Solvency?, by Scott E. Harrington - 9p
  • 1992 - State Solvency Regulation of Property-Casualty and Life Insurance Companies - Advisory Commission on Intergovernmental Relations - 144p
  • 1993 - SOA - Life Company Solvency -- Has The Industry Stabilized?, Society of Actuaries - 18p
  • 1994 04 - CBO - The Economic Impact of a Solvency Crisis in the Insurance Industry, Congressional Budget Office  ---  [BonkNote]  ---  80p
  • 1994 - SOA - Forum on Dynamic Solvency, Society of Actuaries - 20p
  • 1995 - Journal of Actuarial Practice - Surveillance of Life Insurer Solvency: A Comparison of Stock and The Multiple Scenario Cash Flow Financial Stress Tests - 27p
    • The solvency of life insurance companies may be threatened by interest rate risk when the maturities of assets and liabilities are mismatched.
  • Bill White, chief actuary, New Jersey, reported on their special project pertaining to universal life. - <WishList>
  • Their commissioner, on June 25, 1982, declared an 81-day moratorium on "Universal-Flexible Factor" type of policies.
  • His staff was directed to
    • (1) study the matter and issue a position paper on the subject;
    • (2) conduct public hearings on March 10-11;
    • (3) terminate the moratorium April 16 with the publishing of a set of guidelines. - <WishList>
  • Reports and results have been mailed to each insurance department.
  • Some of the questions New Jersey conveyed included:
    • (1) are these policies participating or non-participating;
    • (2) the "Bait and Switch" potential;
    • (3) disclosure;
    • (4) Federal Income Tax aspects;
    • (5) non-forfeiture values;
    • (6) replacement problems.
  • The concern was not just with the "twisting" replacements, but was the impact of justified replacements on the solvency of replaced companies.

1982-2, NAIC Proceedings

  • The one financial institution which is still stable and in which the public still has confidence, and that is life insurance, cannot stand very many more months continuation of this situation.
  • ........life insurance companies are not nearly so solvent as their re­ports might indicate.
  • A tremendous load of credit loans has been transferred from banks to life-insurance companies. (p102)

--  C.V. Gregory (Editor of the Prairie Farmer, Chicago, ILL)

1932 - FRB - Federal Reserve Board : Bill Opposition - Price Stabilization, 1932, Subject File, Box 119, Folder 8 - 212p

  • 3. H.R. 1290 -  Bob Mackin (NCOIL) expressed concerns about the various industry and related groups that have publicly supported H.R. 1290.
    • Assemblyman Lasher said that NCOIL and NAIC should present a coordinated effort to oppose the legislation for the best interest of insurance consumers.
    • Director McCartney noted that consumer groups generally agree that H.R. 1290 does not offer any consumer protection.
    • The members agreed to continue to coordinate their efforts to defeat the federal legislation that would preempt state regulation of insurance.

1993-2, NAIC Proceedings

H.R.1290 - Federal Insurance Solvency Act of 1993103rd Congress (1993-1994) - congress.gov/bill/103rd-congress/house-bill/1290?s=1&r=34

  • During the past decade, the savings and loan crisis and the problems of the banking industry have focused the public's attention on the financial problems in the insurance industry and their implications for the overall economy.
  • The life insurance industry suffered from some of the same competitive forces that hurt the savings and loan and banking industries.

1994 04 - CBO - The Economic Impact of a Solvency Crisis in the Insurance Industry, Congressional Budget Office  ---  [BonkNote]  ---  80p

  • PROPOSED NEW INSURANCE LAW
  • Acting upon the suggestion by Superintendent Hotchkiss, Governor Hughes sent to the legislature last week a message, asking for the enactment of a law conferring created the necessity for some such law, it will be noted that upon the Superintendent power to deal summarily with insolvent insurance companies, or when their affairs are so managed as to render their continuance in business hazardous to the public.

1909 - The Spectator, VOL. LXXXII, MARCH 18

  • The necessity of some such authority being commended in the head of the Insurance Department was demonstrated most emphatically in the recent  entanglements connected with the attempt to transfer the Washington Life to a Pittsburg company and remove its assets from the jurisdiction of the State of New York, which attempt was frustrated by the prompt action of the Attorney General.

1909 - The Spectator, VOL. LXXXII, MARCH 18

  • Based on the Subcommittee's work outlined above, the Committee has determined that additional investigative action relative to the insurance industry is called for.
    • In particular, the Committee believes the Treasury Department should undertake a study to determine what actions, if any, might be taken at the Federal and/ or State levels to reduce the impact of solvency problems on the ability of insurers to extend credit through intermediation, particularly through the provision of loans.
    • The study should also determine what additional actions, if any, might be taken at the Federal and / or State levels to reduce the likelihood and magnitude of insurance company solvency problems.
    • In testimony before the Subcommittee on the role of the National Association of Insurance  Commissioners in the regulation of the insurance industry, NAIC vice-president William McCartney stated that if state regulators are not able to make significant strides towards implementing stronger regulatory action by the end of 1994, then more aggressive steps at the Feder al level may be called for.
  • The Committee believes that this study authorized by H.R. 4731 complements the suggested time frame that the states are currently working within.
  • The principal basis for the Committee's concern over to the insurance industry relative to H.R. 4731 is the significant role insurance companies play in the extension of credit to individuals, industry and commerce, as well as their role in urban development
    and the impact of their financial intermediation on Federal monetary policy.

1992 - GOV - House Reports Nos. 651-699 - 102d Congress - 2d Session January 3 - October 9, 1992