Colorado Bankers (CB Life)...

[Tahoe Ray]

An alternative to that (and no one is going to want to hear this) is to have companies actually post statutory reserves vs. a letter of credit like NY does.

Also, I know that ratings aren't infallible but they should at least be considered when making a large purchase such as an annuity.

 

[rousemark]

An alternative to that (and no one is going to want to hear this) is to have companies actually post statutory reserves vs. a letter of credit like NY does.

Also, I know that ratings aren't infallible but they should at least be considered when making a large purchase such as an annuity.

Just watched an American Greed program last night about Jeffery Cohen sending false bank statements to AM Best to achieve an A rating for Indemnity Insurance Corp.

 

[Tahoe Ray]

Just watched an American Greed program last night about Jeffery Cohen sending false bank statements to AM Best to achieve an A rating for Indemnity Insurance Corp.

I'll have to check that one out. Like I said, not infallible but should be part of the picture.

 

[DonP]

Why are 95% of CO’s not in ny state ? It’s the big reserves they require as I recall . You put those reserve requirements on these small CO’s and they’d hardly grow . That’s exactly why no life ins death benefit has never not been paid . It starts getting out that CO’s going Bk not paying claims the govt gets involved and hurts all CO’s .Its in the best interest of the big strong CO’s to buy these bk out .

 

[rats0001]

The GBIG owed Pavonia rehab is complete. This is from the filing of the Michigan rehabilitator on page 10 of the agreement of sale dated 9/7/2022.

Because the NC Insurer Affiliates are all in a North Carolina rehabilitation due to their financial trouble stemming from the loans/investments directed by Mr. Lindberg with his various noninsurance affiliate companies, the NC Insurer affiliates are "threatened with insolvency" if not "insolvent."

So lets get on with the liquidation, these companies can't be rehabilitared, everyone knows that.

 

[Allen Trent]

The GBIG owed Pavonia rehab is complete. This is from the filing of the Michigan rehabilitator on page 10 of the agreement of sale dated 9/7/2022.

Because the NC Insurer Affiliates are all in a North Carolina rehabilitation due to their financial trouble stemming from the loans/investments directed by Mr. Lindberg with his various noninsurance affiliate companies, the NC Insurer affiliates are "threatened with insolvency" if not "insolvent."

So lets get on with the liquidation, these companies can't be rehabilitared, everyone knows that.

Never heard of Pavonia & I have lived my entire life in Michigan,must be a tiny company.

Are you saying it is now owned by GBIG & no need or involvement of any of the State Guaranty Assoc of the states it sold products in?

 

[Tahoe Ray]

Why are 95% of CO’s not in ny state ? It’s the big reserves they require as I recall . You put those reserve requirements on these small CO’s and they’d hardly grow . That’s exactly why no life ins death benefit has never not been paid . It starts getting out that CO’s going Bk not paying claims the govt gets involved and hurts all CO’s .Its in the best interest of the big strong CO’s to buy these bk out .

There are a lot of reasons but to expand on the one I mentioned...

Insurance companies typically have two types of reserve numbers: Statutory (which is what the states say they should have) and economic (which is what their actuaries say they should have).

Statutory reserves are normally higher but most states allow the insurance carrier to submit a letter of credit, basically saying "yeah, we're good for the difference but don't want to tie those assets up, they're in Bermuda or something".

NY doesn't delineate between the two (because they can't really audit the books of dozens of shell companies) so naturally, they have much higher reserving requirements and companies don't want to tie up those assets.

This may be overly simplified but is one reason why we have fewer carriers in NY and the ones that do business here are mainly large companies.

 

[DonP]

There are a lot of reasons but to expand on the one I mentioned...

Insurance companies typically have two types of reserve numbers: Statutory (which is what the states say they should have) and economic (which is what their actuaries say they should have).

Statutory reserves are normally higher but most states allow the insurance carrier to submit a letter of credit, basically saying "yeah, we're good for the difference but don't want to tie those assets up, they're in Bermuda or something".

NY doesn't delineate between the two (because they can't really audit the books of dozens of shell companies) so naturally, they have much higher reserving requirements and companies don't want to tie up those assets.

This may be overly simplified but is one reason why we have fewer carriers in NY and the ones that do business here are mainly large companies.

No different than when the Fed punished Wells Fargo a few yrs ago . They made them retain much more deposits as capital reserves thus it tied up capital so they couldn’t grow during those few yrs . Also happened after the 2008 collapse . They made app banks hold more capital in reserves for safety and thud couldn’t be used to grow . Ny state requires more safety in reserves thus smaller more aggressive CO’s avoid .

 

[rats0001]

In regards to Pavonia Life, it was owned by GBIG, who received 75MM for selling it to a PE company called AXAR. Pavonia was weird because it was not insolvent but was put into rehab, because of its ownership by Lindberg and the fact the 4 NC companies being put into rehab, I think.

This is a done deal, as I read the court filings, and no state guarantee funds were involved.

See here

https://www.michigan.gov/difs/-/med...7-22.pdf?rev=ae4b4afa6f7a45b79ce793bed6590b93

 

[Newby]

Not in favor of turning regulation over to the feds. However, there is nothing to prevent the states actually funding their guaranty funds using a premium tax.

The big thing is if the STATE or FEDERAL government actually guaranteed it. Then it would be like FDIC insurance. Of course it would need real funding if they were going to do that.