Mutual if Omaha Just Left NYS

NY has a higher reserve requirement than other states. The companies don't like it because they have to put aside more than they want. NY will also not allow use of the "self owned" re-insurance companies that are all the rage.

The comp in NY is bad but these laws? I like them. Plenty of Term and GUL carriers in NYS. Just thought it was interesting that such a large company made this move.
 
NY has a higher reserve requirement than other states. The companies don't like it because they have to put aside more than they want. NY will also not allow use of the "self owned" re-insurance companies that are all the rage.

The comp in NY is bad but these laws? I like them. Plenty of Term and GUL carriers in NYS. Just thought it was interesting that such a large company made this move.

Thanks, L5tc. I wonder if you might be able to point me to a link that shows that NYS doesn't allow the use of wholly-owned captives. It seems consistent with the Shadow Insurance report that Lawsky put out when he was running the NYFS dept.; but, I didn't know they explicitly prohibited the use of wholly owned captives.

I guess that's why you see all these carriers with a subsidiary dedicated to selling product to just NY state?
 
There was a piece in the NY Times about the self owned Re-Insurance companies that ran over a year ago at least. Most of them are set up in Vermont. It's a work around to not have to adhere to the requirements on uses of reserve capital.

This is relatively recent. There are other reasons, historically, that caused companies to incorporate separately in NY. I'm sure some other people on here would know.
 
The comp in NY is bad but these laws? I like them. Plenty of Term and GUL carriers in NYS. Just thought it was interesting that such a large company made this move.

NOT "plenty" compared to other states. If the trend continues, perhaps you will discover too late, that New York's reserve laws are draconian and simply reflect the "nanny state" mentality of New York regulators and lawmakers. At the very least they think they are smarter than 49 other states.

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There are other reasons, historically, that caused companies to incorporate separately in NY. I'm sure some other people on here would know.

The problem is that if you use the company in NY, that you use in the other 49 states, then you must impose the rules of NY on all your customers in the other 49. So if you want to be competitive in the other 49, and not risk having NY throw a monkey in your wrench, the smart move is to NOT use the company for most states you do business with, in the state of NY.

I'm sure there are those who think, "Who cares?", but the price paid for overpriced products and fewer choices is the NY consumer. Does anyone here care about them?
 
The products here are not "overpriced" on the life side. And NYS has nothing to do with pricing in other states that's anecdotal nonsense. The reserve requirement is high in NY, they feel they can't make money, whatever. McCarren Ferguson law and all that. States are free to do what they want AmGen pulled out because if this, so did MOO.

Nanny State is a political discourse I'll take a pass in and it's not pertinent.
 
The products here are not "overpriced" on the life side. And NYS has nothing to do with pricing in other states that's anecdotal nonsense. The reserve requirement is high in NY, they feel they can't make money, whatever. McCarren Ferguson law and all that. States are free to do what they want AmGen pulled out because if this, so did MOO.

Nanny State is a political discourse I'll take a pass in and it's not pertinent.

Yes they are overpriced. Same exact product is a good 20% higher in NY.

To call NYs insurance laws draconian would be an understatement. It seems you have guzzled the cool-aid... it sure does taste a lot better than the truth.

NYs regulations hurt consumers, they do not help. Insurers in other states have plenty of reserves, to imply that policies held by NY residents are more secure than those in others states is pure fallacy.
 
It does not surprise me at all that the NYFS Dept, situated as it is and having seen all it has seen of what Wall Street can do, would ask demand higher reserves than any other state. If it were some self-righteous regulator in the Midwest, sure, I'd blow the whistle and cry "arrogance," too.

But after reading further into these strange reserving and accounting practices, I won't be so quick to pass judgment.

I would rather see all the companies compete at more conservative rates than have them all fabricate surplus in Iowa and drive themselves into razor thin margins. Fat insurance companies are better, even for consumers, than thin ones.

And the problem is not the commissions. It's the bonuses. The execs are the ones running out the henhouse with pockets full of eggs and armfuls of chickens.
 
Forcing a company to carry higher reserves is a cost passed to consumers. And later, when those reserves are released back to the company, when a policy lapses, they become profit for the company.

New York consumers are being treated badly by New York.

No surprise really, New York plays this game in all sorts of industries domiciled in NY, which is why so many have left and why New York is spending billions trying to persuade them to come back or to attract new business. And that isn't working either.

Funny how some think it's not a politically related issue.
 
That is one way to look at it, Bob. But as you know, the reserves of life insurance companies are their liabilities . . . and they belong to the future policy beneficiaries. So, from a strict accounting standpoint, increasing reserves is actually benefiting the people policyholders intend to bless when they buy coverage - their beneficiaries.

If it were just another means to fleece consumers and add to life insurance company profit, why would the companies fight it so hard?
 
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