All articles by LII editorial
LII editorial
AIG’s other multi-billion dollar blunder
While its is clear that risk management blunders in AIGs Financial Products unit triggered the insurers current plight, its securities lending programme also played a key role This role was the focus of testimony presented to the Senate by the superintendent of the New York State Insurance Department With financial disaster engulfing American International Group (AIG), much of the focus is on damage caused by credit default swap derivatives, a form of insurance offering protection against default of credit instruments written by AIG Financial Products (AIGFP), a unit regulated the federal Office of Thrift Supervision
Progressing on a slow recovery path
After years of decline, Switzerlands domestic life insurance market enjoyed a modest recovery in 2007 and 2008 Though Switzerlands economy is experiencing the negative impact of the global recession, Swiss Insurance Association chairman Erich Walser believes the Swiss life market will remain resilient A year ago Erich Walser, chairman of the Swiss Insurance Association (SIA), hailed a 2.1 percent increase in the Swiss life industrys domestic premium income in 2007 as a clear sign that it was in the midst of a growth turnaround
Fixed annuities one bright spot in US market
For US life insurers, the fourth quarter of 2008 was a dismal one with sales performance in some sectors the worst in over half-a-century of recording But there was one bright spot fixed annuities reported financial services organisation, LIMRA International According to LIMRA, fixed annuity sales continued their winning streak in the fourth quarter, soaring by 79 percent compared with the fourth quarter of 2007 to $34.9 billion
New mortality tables will shrink industry
The US life settlements industry is in for an unpleasant shake-up which could see its ranks shrink, predicts Leonard H Goodman, chairman and CEO of life settlements provider First Equity Benefits of America (FEBA) Goodman expressed this view following the announcement of changes to mortality tables by a number of actuarial firms indicating a significant increase in life expectancy US actuarial firms involved include ICS Services, 21st Services and AVS Underwriting.
Old Mutual on a transformation path in South African markets
Old Mutual South Africa (OMSA), a unit of UK insurer Old Mutual Plc, has clinched a deal that will see it acquire full control of acsis, a financial advisory and consulting firm active in the South African private client and retirement funds markets OMSAs managing director, Paul Hanratty, termed the acquisition a key step in OMSAs strategy of transforming itself into a savings and wealth management business acsis, which will retain its brand and function autonomously, has enjoyed strong growth in recent years and according to the South African Association of Collective Investments, increased assets under advice from ZAR10 billion ($1 billion) in 2005 to ZAR20.3 billion in 2008.
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Slower growth on cards for 2009
One reason to be cheerful came from the UKs defined benefit (DB) pensions bulk annuity market Aon Consulting, a unit of insurance broker and risk management service provider Aon, reported how the total value of buyout and buy-in deals soared 193 percent to £8.2 billion ($11.9 billion) compared with 2007 figures.
UK regulator backtracks on mis-selling reform
UK regulator the Financial Services Authority (FSA) has come under fire from consumer advocacy group Which The accusation follows the FSAs announcement that it has established a further consultation paper relating to compensation and redress payments arising from what it terms operational failures including mis-selling that life insurers may currently charge to the inherited estate of their with-profits funds.
US debate rages on
Soon to be introduced in the House of Representatives, the National Insurance Consumer Protection and Regulatory Modernisation Act is set to spark heated debate on the thorny issue of federal regulatory involvement of the US insurance industry Central to the proposed legislation is the formation of an Office of Insurance Information within the US Treasury, which one of the bills two authors, congressman Ed Royce, stated would fill a gap prior to beginning debate on regulatory reform. Focus of reform has long been on creation of an Optional Federal Charter (OFC) that would enable insurers to choose between current state regulation and federal regulation
Conseco on the brink of bank credit default
Conseco, a survivor of Chapter 11 bankruptcy, has a new dark cloud hanging over it as it teeters on the brink of defaulting on its senior secured bank credit facility The deciding factor will be the US life and health insurers auditors who have warned they are considering issuing a qualified opinion as to its ability to continue as a going concern. Should such an opinion be included in Consecos 2008 financial statements it would constitute a default unless waived by lenders.
Insurers haul SEC into court
Opponents of the US Securities and Exchange Commissions (SEC) Rule 151A, under which it will assume regulation of indexed annuity products as securities in January 2011, are not taking the matter lying down Joining forces under the banner of the Coalition for Indexed Products (CIP), four insurance companies and two independent marketing organisations have filed suit in the US Court of Appeals for the District of Columbia Circuit to overturn Rule 151A. Rule 151A was published in the Federal Register and a suit was filed on 16 January this year.