Yes, they are life companies. So what?
All carriers, even the "big boys" are heavily reinsured. This is especially true in the health market.
I have been in the middle of reinsurance deals with some major carriers in the past, as well as smaller ones. The small, B rated carriers generally do a much better job of managing their portfolio than the gorilla companies.
In the past when Met, MONY, Penn Mutual and others were in the health market they screwed it up royally. Even Aetna did such a poor job they left the individual market entirely for 15+ years before re-entering about 2 years ago. Not convinced they know what they are doing but they have the assets to piss away a few million before deciding to get it or get out.
CGI was never a major carrier but has had some longevity. Their biggest problem was all the private label stuff they got into. Every marketing company with 100 sub-agents could get a deal with CGI. Only one that really made it work were the folks that started QQLink.
When a carrier sells their block (as Ceres did for CGI & CRL) the policy holders transition to the new plan. Same thing happened where Unicare operated and then pulled out (like in GA where they sold their block to BX).
When a carrier pulls out (Mid-South, Mutual of Omaha, Conseco) it becomes a different story. Some folks will end up losing coverage but that has nothing to do with the rating of the carrier.
When MuBen and Baldwin bit the dust folks who had purchased their annuity & investment products (mostly for qualified plans) lost money . . . unless they were willing to wait out the reorganization and take a lesser payout with no loss in principal.
Folks with Conseco life & annuity products did not lose their coverage but had to pay a much higher premium to keep the life in force, or take hits on the annuity biz.
All business is heavily reserved. Health is mostly short tail business and doesn't require much more than 30% or so in reserve. Long tail biz like life & LTD requires a different reserve structure and is less highly leveraged.
And all lines are reinsured at some entry point to protect both the carrier and the policy holder.
All carriers, even the "big boys" are heavily reinsured. This is especially true in the health market.
I have been in the middle of reinsurance deals with some major carriers in the past, as well as smaller ones. The small, B rated carriers generally do a much better job of managing their portfolio than the gorilla companies.
In the past when Met, MONY, Penn Mutual and others were in the health market they screwed it up royally. Even Aetna did such a poor job they left the individual market entirely for 15+ years before re-entering about 2 years ago. Not convinced they know what they are doing but they have the assets to piss away a few million before deciding to get it or get out.
CGI was never a major carrier but has had some longevity. Their biggest problem was all the private label stuff they got into. Every marketing company with 100 sub-agents could get a deal with CGI. Only one that really made it work were the folks that started QQLink.
When a carrier sells their block (as Ceres did for CGI & CRL) the policy holders transition to the new plan. Same thing happened where Unicare operated and then pulled out (like in GA where they sold their block to BX).
When a carrier pulls out (Mid-South, Mutual of Omaha, Conseco) it becomes a different story. Some folks will end up losing coverage but that has nothing to do with the rating of the carrier.
When MuBen and Baldwin bit the dust folks who had purchased their annuity & investment products (mostly for qualified plans) lost money . . . unless they were willing to wait out the reorganization and take a lesser payout with no loss in principal.
Folks with Conseco life & annuity products did not lose their coverage but had to pay a much higher premium to keep the life in force, or take hits on the annuity biz.
All business is heavily reserved. Health is mostly short tail business and doesn't require much more than 30% or so in reserve. Long tail biz like life & LTD requires a different reserve structure and is less highly leveraged.
And all lines are reinsured at some entry point to protect both the carrier and the policy holder.
