Friday, May 29, 2009

 

Blue Frog Solutions Receives ACORD LOMA Honor for Shared Service/Outsourcer or Infrastructure Platform/Middleware

Blue Frog Solutions... won a prestigious award at the ACORD LOMA conference here earlier this month...

Globe Newswire: Blue Frog Solutions Receives ACORD LOMA Honor for Shared Service/Outsourcer or Infrastructure Platform/Middleware

 

Variable Annuity Assets Decline on Slump in Equities

Assets in U.S. variable annuities declined 5.4 percent in the three months ended March 31 as stock markets plunged and savers scaled back purchases.

Total assets were $1.07 trillion at the end of the first quarter compared with $1.13 trillion on Dec. 31, said NAVA Inc., a trade group for companies that sell the retirement products, in an e-mailed statement today...

Bloomberg: Variable Annuity Assets Decline on Slump in Equities

 

Pennsylvania congressman reintroduces National Insurance Office bill

As he continues the push for the federal regulation of insurance, Pennsylvania Rep. Paul E. Kanjorski, a Democrat, has reintroduced what he is calling a “minimum step” for more oversight of the industry.

Kanjorski, the chairman of the House Financial Services Capital Markets, Insurance and Government Sponsored Enterprises Subcommittee, announced May 22 that he has introduced HR 2609, calling for a National Insurance Office...

IFAwebNews: Pennsylvania congressman reintroduces National Insurance Office bill

 

MetLife CEO says insurers need voice in Washington

MetLife Inc (MET.N) Chief Executive Robert Henrikson on Friday said the economic crisis has made it imperative that the life insurance industry be given a voice in Washington...

Reuters: MetLife CEO says insurers need voice in Washington

 

Bond Vigilantes Confront Obama as Housing Falters

For the first time since another Democrat occupied the White House, investors from Beijing to Zurich are challenging a president’s attempts to revive the economy with record deficit spending. Fifteen years after forcing Bill Clinton to abandon his own stimulus plans, the so-called bond vigilantes are punishing Barack Obama for quadrupling the budget shortfall to $1.85 trillion. By driving up yields on U.S. debt, they are also threatening to derail Federal Reserve Chairman Ben S. Bernanke’s efforts to cut borrowing costs for businesses and consumers.

The 1.5-percentage-point rise in 10-year Treasury yields this year pushed interest rates on 30-year fixed mortgages to above 5 percent for the first time since before Bernanke announced on March 18 that the central bank would start printing money to buy financial assets...

Bloomberg: Bond Vigilantes Confront Obama as Housing Falters

 

Decisions that Rock Retirement Income

Seventy just may be the new 62 when it comes to retirement. The vast majority of American workers (89 percent) say they are delaying retirement in order to increase the chances their nest egg will last a lifetime1.

Postponing retirement is just one of a number of critical decisions that can make or break financial security in retirement. Financial professionals can help clients understand the implications of their choices using new educational guides from the Principal Financial Group®.

Decisions that Rock Retirement Income
Source: Insurance News Net

 

A Bleak Start to 2009 for Earnings of Biggest Life Insurers

The start of 2009 was bleak for the biggest U.S. life insurers, as MetLife, Prudential Financial, Hartford and Lincoln National Corp. all posted first-quarter net losses on many of the same problems that plagued them throughout 2008. These include hefty credit-related losses and impairments in their investment portfolios triggered by the credit crisis and resulting economic downturn.

A Bleak Start to 2009 for Earnings of Biggest Life Insurers
Source: Trading Markets

 

Want a Guaranteed Retirement Income? You Won't Find it In Washington, DC or Wall Street, says Annuities Expert

For over 100 years, annuities were the vehicle of choice for guaranteed retirement income in the United States. And now, with the stock market having lost nearly half its value, annuities are back in the news.

“A lot of Americans are confused about annuities,” says annuities expert Rick Bueter. “There’s a lot of disinformation out there, and frankly, some kinds of annuities have been given a ‘bad rap.’ But with so many Americans losing their life savings in the stock market, more and more of them are asking about guaranteed retirement income. And there’s really only one way to get that: you go to an insurance company and ask for an annuity.”

Want a Guaranteed Retirement Income? You Won't Find it In Washington, DC or Wall Street, says Annuities Expert
Source: Press Media Wire

Thursday, May 28, 2009

 

Fixed Annuities Soar, VAs Plummet, LIMRA Says

For the second quarter in a row, fixed annuities outsold variable annuities $35.6 billion to $30.7 billion, according to LIMRA’s U.S. Individual Annuities First Quarter 2009 Sales Report.

“The last time fixed annuities outsold variable for two consecutive quarters was in the first half of 1995,” said Joe Montminy, research director for LIMRA's annuity research. “Consumers, still leery of the volatile stock market and looking for secure, competitive guaranteed rates of return, continued to invest more money into fixed annuities for their retirement income needs.”

Fixed Annuities Soar, VAs Plummet, LIMRA Says
Source: Insurance News Net

 

Don't Pay Too Much for This Investment

When you're looking to buy most products, you expect to pay more for something that's worth more. But when it comes to guaranteed variable annuities, buyers are paying more for protection than they did in recent years -- even though the market has already dropped substantially.

Don't Pay Too Much for This Investment
Source: Motley Fool

 

Voters Urged to Support Budding Moves to Include Long Term Care in National Heath Reform

Although President Obama has called for affordable, accessible, high-quality health care for all Americans, "There's no guarantee the legislation will bridge the long term care gap," says Denise Gott. "Only about 9 million Americans, a fraction of our 300 million plus, have long term care insurance. And among those at greatest risk, 45 and older, more than 9 in 10 go uncovered. Health reform won't be complete unless Congress addresses this gaping hole." Gott is Chairman of the Board of LTC Financial Partners LLC (LTCFP) -- http://www.ltcfp.com -- one of the nation's most experienced long term care insurance agencies.

Voters Urged to Support Budding Moves to Include Long Term Care in National Heath Reform
Source: PR Newswire

 

Sotomayor’s Appellate Opinions Are Unpredictable, Lawyers and Scholars Say

In the decade she has served on the Second Circuit Court of Appeals — the busiest appellate court for business and financial matters in the nation — Judge Sonia Sotomayor has authored some 150 civil and business cases and voted on hundreds more. But many lawyers and scholars who have examined her record closely say that her opinions in this field are unpredictable, and do not put her clearly in a pro- or anti-business camp...

NY Times: Sotomayor’s Appellate Opinions Are Unpredictable, Lawyers and Scholars Say

 

JP Morgan Stands To Reap Windfall Of $29B

Federal Deposit Insurance Corp. would not have imagined last year that J.P. Morgan Chase (JPM) will make a windfall from the purchase of troubled Washington Mutual Inc (WaMu). However, thanks to a new accounting rule, JPM is set to reap $29 billion in income on the same toxic sub-prime mortgages that threatened to topple WaMu.

The new purchase-accounting rule offers the banks with accretable yield - the difference between the price of the loans on the banks' balance sheets and the cash flow they are expected to create...

BBR: JP Morgan Stands To Reap Windfall Of $29b

 

Morgan Stanley raises view on US life insurance sector

Morgan Stanley raised its view on the U.S. life insurance sector to "attractive" from "in-line," saying concerns about capital adequacy have diminished and the fundamental outlook for the group is improving...

Reuters: Morgan Stanley raises view on US life insurance sector

 

S&P Changes MassMutual Outlook To Negative From Stable

Standard & Poor's Ratings Services changed its outlook on Massachusetts Mutual Life Insurance Co. to negative from stable, citing its weaker capitalization and financial flexibility.

"Although we still consider them very strong, they have weakened because of the prolonged economic downturn and deepening credit cycle," said credit analyst Robert A. Hafner...

WSJ: S&P Changes MassMutual Outlook To Negative From Stable (Subscription required)

 

Moody's affirms AAA rating for TIAA

Moody's Investors Service has affirmed a top AAA rating on the insurance financial strength of the Teachers Insurance and Annuity Association of America (TIAA), and its subsidiary, TIAA-CREF Life Insurance Co. which employs more than 1,400 people in Denver, the credit rating agency said Wednesday...

BizJournals: Moody's affirms AAA rating for TIAA

 

Life Insurers Seen Fit To Survive The Crisis

Even if markets turn sour again, life insurers and reinsurers are considered to be fit enough to weather the financial and economic crisis because of their solid balance sheets, industry experts said Wednesday.

Rating agency Moody's Wednesday issued an optimistic note on the sector, saying its capital and liquidity stress test showed that even in a worsening market that could result in further downgrades, insurers are likely to retain investment grade ratings...

WSJ: Life Insurers Seen Fit To Survive The Crisis (Subscription required)

 

At The Hartford, 200 Layoffs In '09, And More To Come

The Hartford has laid off about 200 employees in the Hartford region so far this year, and more job cuts are coming locally and companywide, CEO Ramani Ayer said in an interview Wednesday after the annual shareholders' meeting...

...The 200 brings the local total to 325 layoffs since the cutting began late last year...

Courant: At The Hartford, 200 Layoffs In '09, And More To Come

 

Variable Annuity Sales Fall 27% as MetLife Takes Lead

Variable annuity sales in the U.S. plunged 27 percent in the first quarter and MetLife Inc. claimed the top spot as other life insurers, battered by losses on the retirement products, scaled back their offerings.

Sales were $30.7 billion in the three months ended March 31, compared with $41.9 billion the same period a year earlier, the trade group LIMRA said today in an e-mailed statement. New York-based MetLife, which ranked fourth in the first quarter last year, boosted its sales 17 percent to $3.74 billion, the only provider in the top nine to post an increase...

Bloomberg: Variable Annuity Sales Fall 27% as MetLife Takes Lead

Wednesday, May 27, 2009

 

Guaranteed Retirement Income Key as Social Security Fund Declines,

The potential for the Social Security system to run out of funds by 2037 underscores the importance of having additional sources of guaranteed income during retirement, according to Christine Marcks, President of Prudential Retirement, a business unit of Prudential Financial, Inc.

Guaranteed Retirement Income Key as Social Security Fund Declines
Source: Yahoo! Finance

 

Researching Life Insurance Online and Want to Speak to an Agent? Good Luck

So many prospective life insurance customers now research products online but continue to buy through an agent so transition from online to offline should be a key priority. The Customer Respect Group has recently completed a comprehensive benchmark evaluation on the subject.

Researching Life Insurance Online and Want to Speak to an Agent? Good Luck
Source: Insurance News Net

 

Riding the Baby Boomer Wave: Finding New Ways to Market Your Practice

As the baby boomer demographic begins to transition out of the accumulation phase, the conversations they share at cocktail parties have changed drastically. For investors who took part in the go-go days of the late 1990s, social gatherings became a platform for comparing the grandiose returns their financial advisors were generating in their portfolio. I'm sure many of you experienced clients demanding to know why their portfolio only went up 45 percent, while the neighbors gloated over a 75 percent gain. It's amazing what a decade can do.

Riding the Baby Boomer Wave: Finding New Ways to Market Your Practice
Source: Producers Web

 

Morgan Stanley Raises View on U.S. Life Insurance Sector

Morgan Stanley raised its view on the U.S. life insurance sector to "attractive" from "in-line," saying concerns about capital adequacy have diminished and the fundamental outlook for the group is improving.

"We are now beginning to see clearer signs of light at the end of the tunnel," the brokerage said in a note to clients.

Morgan Stanley Raises View on U.S. Life Insurance Sector
Source: Reuters

 

ACLI: STOLI Threatens Seniors, Integrity Of Life Insurance Market

A fraudulent transaction in which financial speculators use life insurance to wager on human life exposes America’s senior citizens to potential tax and legal liability and threatens the integrity of the life insurance marketplace, James J. Avery, president of individual life insurance with Prudential Financial, told a congressional panel today...

Docuticker: STOLI Threatens Seniors, Integrity Of Life Insurance Market

 

Insurer posts accident data online

If you knew in advance what sorts of conditions led to accidents, you’d avoid them, right? Of course you would... That’s part of the thinking behind a new accident-registry system announced by NAL Insurance last week...

...Last week, NAL announced that it’s adding an online registry to its list of free tools available on its web-based Fleet Administration System. The Accident Register captures all the information required by FMCSA, DOT and MTO.

The program provides comprehensive reports that enable fleets to better identify the common causes of accidents such as equipment, training, weather conditions, etc...

Today's Trucking: Insurer posts accident data online

 

Investment Losses Play Role In Dartmouth, TIAA Ratings

Investment losses played a large part Tuesday in Dartmouth College being stripped of its long-term triple-A bond rating and in a warning that TIAA and TIAA Global Markets, Inc. could lose their triple-A ratings.

Standard & Poor's downgraded Hanover, N.H.-based Dartmouth to "AA"-plus, noting "significant losses" of 21% in the Ivy League school's endowment as of December, although it said that's "in line with market trends."

Moody's Investors Service, meanwhile, placed the gilt-edged issuer ratings of Teachers Insurance and Annuity Association of America and the TIAA-guaranteed senior unsecured debt of TIAA Global Markets, Inc. under review for possible downgrades. It affirmed the Aaa insurance financial strength ratings with a stable outlook of TIAA and its TIAA-Cref Life Insurance Co. unit...

WSJ: Investment Losses Play Role In Dartmouth, TIAA Ratings

 

Regulating Insurers: Two Perspectives

To the Editor:

The concern voiced in “Regulator Shopping” (editorial, May 21) is unwarranted.

Life insurers are asking Congress to enact legislation to create an optional federal charter in which consumer protections meet the highest state standards and are uniform across the country. In the wake of the financial crisis, Congress is in no mood to do less.

The federal standards would serve as a model for states that lag behind. Indeed, the current state-by-state system leaves some consumers vulnerable.

In an April report, the Government Accountability Office said of the current system, “Lack of uniformity and reciprocity may lead to inefficiencies, higher insurance costs and uneven consumer protection across states...”

NY Times: Regulating Insurers: Two Perspectives

 

MetLife Tries Bank Cross-Selling Plan Via Mortgages

The ruined finances and reputation of many mortgage lenders is providing an opportunity for MetLife Inc.'s (MET) bank... MetLife's plan takes a page from the banking playbook: Offer mortgage loans with the well-known MetLife brand to high credit-scoring customers, then try to sell them traditional insurance products.

"A lot of our agents really like the bank," said Bill Wheeler, MetLife's chief financial officer, at the company's investor day in June. "We've had a very surprising level of success of cross-sell between Internet customers [to whom] we then say, 'Would you like to talk to a MetLife agent about your retirement needs and stuff like that?' And you'd be surprised how good it's been, but it's small still..."

WSJ: MetLife Tries Bank Cross-Selling Plan Via Mortgages

 

IRS Sets Out Limits for Employer-Owned Life Insurance Expense

The Internal Revenue Service (IRS) has, in Notice 2009-48, set limits on expenses for employer-owned life insurance that policyholders can deduct from their gross income.

In the notice, the IRS defined "employer-owned life insurance contract" and presented guidance in a question-and-answer format on exceptions to the provisions, notice and consent requirements, a transition rule, reporting requirements, and the effective date of the guidance.

The Notice provides a definition of “employer-owned life insurance contract” as a life insurance contract that (1) is owned by a person engaged in a trade or business, and under which such person (or a related person) is directly or indirectly a beneficiary under the contract, and (2) covers the life of an insured who is an employee of the applicable policyholder (generally the person who owns the contract) on the date the contract is issued...

PlanAdviser: IRS Sets Out Limits for Employer-Owned Life Insurance Expense

 

AnnuiQuote.com Website Redesign Now Makes It Easier For Consumers to Connect With Trained Annuities Providers

AnnuiQuote.com has announced a major website redesign that now makes it easier for consumers to learn more about annuities and connect with multiple annuities providers...

...Website visitors can download a free guide on how they can use annuities to plan for their future and meet their financial planning goals. This detailed guide walks beginners through the various types of annuities, such as fixed annuities and immediate annuities, as well as the advantages of each annuity type...

PRweb: AnnuiQuote.com Website Redesign Now Makes It Easier For Consumers to Connect With Trained Annuities Providers

 

A.M. Best Special Report: Life/Health Insurers Grow More Vulnerable to Financial Impairment Due to Losses

Seven life/health and annuity insurers became financially impaired in 2008 and three impairments have emerged thus far in 2009. At least two of the financially impaired companies (FICs)—life/annuity writers Standard Life Insurance Company of Indiana in 2008 and Shenandoah Life Insurance Company in 2009—were related directly to the subprime crisis. Three more impairments were added to the list in 2007, bringing that year’s count to nine. Most of the other FICs were accident and health insurers whose reserves and capital were stressed by inadequate pricing, higher-than-expected claims and expenses and were weakened to the point of impairment by the current economic environment...

BusinessWire: A.M. Best Special Report: Life/Health Insurers Grow More Vulnerable to Financial Impairment Due to Losses

 

Millionaires Go Missing

Maryland's fleeced taxpayers fight back. -- Here's a two-minute drill in soak-the-rich economics:

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls...

WSJ: Millionaires Go Missing

Tuesday, May 26, 2009

 

ANALYSIS: U.S. Economy at Risk of Double-Dip Recession

The U.S. economy appears destined for several years of weak growth and high unemployment that leave it vulnerable to a recession relapse after the massive dose of government stimulus wears off...

Reuters: ANALYSIS: U.S. Economy at Risk of Double-Dip Recession

 

An Advisor's Guide to Staying Sane

Like the crew in an airliner crash, financial advisors need to stay clear-headed to help clients survive the disaster.

Financial advisors are a lot like the folks responsible for getting you safely from one airport to another. It's a cinch when skies are clear, winds calm and the equipment in tip-top condition. The real test comes when something goes wrong, as it has in our economy and capital markets...

Forbes: An Advisor's Guide to Staying Sane

 

New Survey Data Shows Life Insurance Offers Many Seniors a Way to Generate Income in Retirement

Older Americans are increasingly feeling pressure from the same issues affecting the larger economy, such as falling home values, losses in their investment portfolios, and difficulty in obtaining loans or lines of credit. Recently released survey data from a poll of those aged 62 or older by senior financial resource Golden Gateway Financial and the Insurance Studies Institute showed that a majority of these individuals are in a position to immediately benefit from life insurance policies that they currently own but no longer need.

New Survey Data Shows Life Insurance Offers Many Seniors a Way to Generate Income in Retirement
Source: Market Wire

 

Be Careful Not to Overreact to Weakness in Insurance Industry

It's ironic.

Insurance is supposed to make you feel safe. Whether you buy life insurance, annuities, disability or long-term care insurance, the idea is to remove the threat of some nasty surprise hurting you or your family at some point in the future.

Be Careful Not to Overreact to Weakness in Insurance Industry
Source: Chicago Tribune

 

Life/Health Insurers Grow More Vulnerable to Financial Impairment Due to Losses

Seven life/health and annuity insurers became financially impaired in 2008 and three impairments have emerged thus far in 2009. At least two of the financially impaired companies (FICs)—life/annuity writers Standard Life Insurance Company of Indiana in 2008 and Shenandoah Life Insurance Company in 2009—were related directly to the subprime crisis. Three more impairments were added to the list in 2007, bringing that year’s count to nine. Most of the other FICs were accident and health insurers whose reserves and capital were stressed by inadequate pricing, higher-than-expected claims and expenses and were weakened to the point of impairment by the current economic environment.

Life/Health Insurers Grow More Vulnerable to Financial Impairment Due to Losses
Source: A.M. Best/Business Wire

 

Enter Retirement One Step at a Time

Falling pension values are now forcing more people to defer, or ‘phase’, their retirement by staying on in work for a few extra years – sometimes on a part-time basis.

Research published this week by MetLife revealed that 54 per cent of people now think their pensions will fall short of expectations, and are worried about their retirement income.

Enter Retirement One Step at a Time
Source: FT.com

 

Canada Offering Guarantees of Life Insurers’ Debt

Canada began guaranteeing borrowings by life insurance companies in the latest effort to ease credit conditions for the country’s financial institutions.

The Canadian government is offering to guarantee life insurer debt with maturities of three months or more at a base fee of 110 basis points, the Finance Department said in a statement on its Web site...

Bloomberg: Canada Offering Guarantees of Life Insurers’ Debt

 

More auto insurers are going to the dogs

At least four U.S. insurance companies offer at no additional cost coverage of $500 to $1,000 for pets injured or killed in car accidents.

Saikou and Kozette are as safe as dogs can be when they go for car rides. The border collie and boxer are always strapped in tight, says Lonnie Olson, 55, of St. Helen, Mich.

Still, Olson says, when she heard that the auto insurance policies offered by Progressive now include coverage for pets injured in vehicle crashes, she decided to move her business to the company...

USA Today: More auto insurers are going to the dogs

 

Though barred, rogue brokers often find work

Regulators say there is a shortfall of data for investors when it comes to such cases: Keeping track of rogue brokers is a tricky business, particularly when they leave or are booted from the confines of the securities industry, but keep peddling financial products... Take, for example, Jeffrey Forrest, who no longer sells securities through a broker-dealer...

Investment News: Though barred, rogue brokers often find work

 

10 features of long-term care insurance

Will you outlive your resources? As health awareness increases and medical care improves, we can expect to live longer than any generation before us. As we live longer, the need for care in our latter years increases. Illness and injury can be prevented and cured, but odds are we'll still need assistance with the activities of daily living. Long term care is a reality. Long term care insurance can be the means to provide the necessary support. Why consider long term care insurance?

Spectrum: 10 features of long-term care insurance

 

10 Things Your Home Insurer Won't Tell You

1. “We have our own caste system.”

Sam Mayer, a physician in suburban Chicago, had insured his home, car, and life with Metropolitan Life Insurance Company for 10 years without ever filing a single claim, until a damaged roof and a burglary led to two legitimate claims totaling $3,000. Mayer promptly installed a new home-security system. But instead of giving him a discount, the company dropped Mayer from its preferred coverage, citing his “claims history,” and instead offered him its standard carrier at a higher rate—even though his risk profile hadn’t really changed.

(“Homeowners insurers may sometimes offer a change in conditions of coverage of a consumer’s policy at renewal in order to continue to offer a policy to that individual whose risk profile has increased,” says a MetLife spokesperson. “This often occurs when a customer files more claims than average in a short period of time.”)

Indeed, almost all insurance firms slot their policies into different categories, based on a variety of factors, including your credit score and the location of your home. But even if your risk profile doesn’t change in any substantial way, you might still be shifted from a company’s preferred carrier to its more expensive counterpart...

SmartMoney: 10 Things Your Home Insurer Won't Tell You

 

Car insurance savings come with 'Big Brother'

Tim Goodwin doesn't spend much time behind the wheel of his 2004 Chevy Tahoe. Even though he only covers about 3,000 miles per year -- using it just for weekend trips -- he had, until recently, been getting no special deal on his insurance for driving so little.

Six months ago, the Springfield, Missouri, property supervisor found a policy that gives him a break. So far he's saved about $48 -- or ten percent -- over six months compared to a traditional premium.

There's a catch; his insurance company, Progressive, is monitoring every move he makes behind the wheel... Goodwin is fine with it, and says that just knowing that a small transceiver is reporting his driving behavior back to the insurance company helps him drive more carefully...

CNN: Car insurance savings come with 'Big Brother'

 

Signals Of AIG's Risks Offer A Lesson To Banks

Described as a "black hole," American International Group Inc. (AIG) is largely inscrutable - but not to everyone. Like the proverbial canary in the coal mine, key reinsurance markets delved deep into the operations of AIG and concluded that they could not sustain life.

Had investment banks had the benefit of the same insight, they might have averted the counterparty risks that required a substantial bailout orchestrated by the U.S. Treasury.

Why did reinsurance markets possess the insight that had eluded investment banks?

WSJ: Signals Of AIG's Risks Offer A Lesson To Banks

 

Keep Tabs on Insurance That Covers Estate Tax

Using life insurance to cover the death tax is common practice, but the strategy is blowing up some estate plans now.

The policies are imploding because of low interest rates. An insurance plan issued years ago, when interest rates were higher, may no longer be earning the investment returns it needs to pay premiums as drafted. That shortfall leaves the owner on the hook for unexpected costs.

If the worst happens and a policy collapses, its demise can even result in a big tax bill...

WSJ: Keep Tabs on Insurance That Covers Estate Tax

 

Insurance: Life

Morgan Stanley analyst Nigel Dally, who has followed life-insurance companies since 2000, says he’s never seen a year quite like 2008. The once steady-as-she-goes industry turned highly volatile in the face of a weakening economy and plummeting stock market...

In this topsy-turvy market, analysts who remained skeptical about the industry and avoided the temptation of jumping in for beaten-down stocks generally fared well. Mr. Dally, 39 years old, upgraded only one stock to buy last year: He switched his rating on MetLife Inc. from hold in October. Shares returned 18% through the end of the year.

He held his ground with a sell for the year on Torchmark Corp., a Texas insurer that suffered losses on investments in the debt of troubled financial companies, such as Lehman Brothers Holdings Inc. American International Group Inc. and Fannie Mae. The return on the stock, including dividends, was minus 25%...

WSJ: Insurance: Life

 

Facebook payments: Think virtual

It's become increasingly clear in recent weeks that Facebook is finally inching toward the launch of a micropayment platform. The social site has been expanding the presence of its virtual currency, which Facebook debuted last November when it changed the monetary units for its "Gifts" product into "credits" rather than U.S. dollars.

Credits are now bundled with some promotional items in the Gifts app. And soon, select developers on the Facebook Platform will be able to start working "credits" into their own applications, in a move that could lead to a lucrative new revenue stream for Facebook, which currently relies on an advertising-based business model. First reported by a number of tech blogs, the company has confirmed this development...

ZDNet: Facebook payments: Think virtual

 

Solvency of Social Security, Medicare worries advisers

Many see need to address future loss of safety net with clients now

Just when market conditions appear to be stabilizing, financial advisers now have something else to keep them awake at night: Both Social Security and Medicare are on a pace to disappear even sooner than expected.

The economic crisis has put both systems — the primary health care and income sources for millions of retirees — on life support, according to reports issued by the government this month. And advisers now find themselves confronted by concerned clients asking whether either program will exist when they retire.

“You now have to plan for the absolute worst-case scenario,” said Erin Botsford...

Investment News: Solvency of Social Security, Medicare worries advisers

 

New crash tests demonstrate the influence of vehicle size and weight on safety in crashes; results are relevant to fuel economy policies

Three front-to-front crash tests, each involving a microcar or minicar into a midsize model from the same manufacturer, show how extra vehicle size and weight enhance occupant protection in collisions. These Insurance Institute for Highway Safety tests are about the physics of car crashes, which dictate that very small cars generally can't protect people in crashes as well as bigger, heavier models.

"There are good reasons people buy minicars," says Institute president Adrian Lund. "They're more affordable, and they use less gas. But the safety trade-offs are clear from our new tests. Equally clear are the implications when it comes to fuel economy. If automakers downsize cars so their fleets use less fuel, occupant safety will be compromised. However, there are ways to serve fuel economy and safety at the same time."

The Institute didn't choose SUVs or pickup trucks, or even large cars, to pair with the micro and minis in the new crash tests. The choice of midsize cars reveals how much influence some extra size and weight can have on crash outcomes...

Insurance Institute for Highway Safety: New crash tests demonstrate the influence of vehicle size and weight on safety in crashes; results are relevant to fuel economy policies

Friday, May 22, 2009

 

Fed’s Plosser Says Inflation to Increase, Warns of Complacency

Federal Reserve Bank of Philadelphia President Charles Plosser said prices may rise 2.5 percent in 2011, a rate well above central bankers’ preferred range, and cautioned against complacency on inflation.

“The economy may be at greater risk of inflation than the conventional wisdom indicates,” Plosser said in a speech yesterday in New York. “While inflation expectations appear to remain anchored, we should not become sanguine about our credibility. It can be easily lost...”

Bloomberg: Fed’s Plosser Says Inflation to Increase, Warns of Complacency

 

AIG’s Liddy Will Step Down

AIG’s board concurs with Liddy that the CEO and chairman roles should be separated and says it will conduct a search to fill each position.

AIG chairman and chief executive officer Edward M. Liddy has informed the company's board of directors that he intends to step down after the board concludes a search for replacements, according to an AIG source. Liddy has recommended to the board that the chairman and CEO roles be separated...

I&T: AIG’s Liddy Will Step Down

 

GMAC receives $7.5 billion in new Treasury aid

Government gives auto lender GMAC more money to shore up capital, loan to Chrysler car buyers

To help GMAC raise additional funds, the Federal Deposit Insurance Corp. took the rare step Thursday of allowing the junk-rated company to gain access to its debt guarantee program. GMAC will be allowed to issue as much as $7.4 billion in debt, guaranteed by the FDIC in case the company defaults on payment...

AP - Yahoo! Finance: GMAC receives $7.5 billion in new Treasury aid

 

Hedge Fund Insurance Costs Rise as Lehman, Madoff Spur Scrutiny

The cost of insuring hedge funds against negligence has risen as much as 20 percent in the past six months after Lehman Brothers Holdings Inc.’s bankruptcy and Bernard Madoff’s Ponzi scheme increased the threat of lawsuits.

A fund manager with $200 million of assets running a “straightforward” strategy is typically paying as much as $60,000 a year for $5 million of coverage, up from $50,000 at the end 2008...

Bloomberg: Hedge Fund Insurance Costs Rise as Lehman, Madoff Spur Scrutiny

 

Florida: Lawmaker wants insurance commissioner to quit

Florida Sen. Michael Bennett is requesting the ouster of Insurance Commissioner Kevin McCarty in a letter sent to Gov. Charlie Crist Thursday... Bennett asked Crist to fire the commissioner of the Florida Office of Insurance Regulation if McCarty does not resign. Bennett sent a five-page letter addressed to McCarty describing how he was angry about the way the commissioner handled his opposition to a property insurance bill that Bennett supported.

Bennett claimed he had a discussion with McCarty and the OIR office on many property insurance issues, including how to keep State Farm Florida from pulling its homeowners coverage out of the state prior to filing SB 2036. The bill was originally written to give policyholders the option of staying with a company whose rate is not controlled by the OIR and also not be assessed by the state...

BizJournals: Florida: Lawmaker wants insurance commissioner to quit

 

Insurance broker sues AIG over business practice

LOS ANGELES—A California insurance broker is suing American International Group, accusing the nation's largest insurance and financial corporation of engaging in unfair business practices... Insurance broker Linda Harris, president of the Independent Financial Planning Group, filed the lawsuit Thursday in Los Angeles Superior Court.

The lawsuit accuses AIG of using funds from its California insurance companies to support its financial services business and telling brokers and policy holders that the insurance business in insulated from its losses in the financial derivatives market...

Mercury News: Insurance broker sues AIG over business practice

 

In Failure Of BankUnited, Hope For Private Equity

FDIC hints restrictions on private-equity ownership in banks may be eased to allow more takeovers of tottering lenders.

Private-equity firms looking to get in on an expected gold rush of bank mergers may take heart in the fate of BankUnited.

A group including a fund run by billionaire Wilbur Ross, Carlyle Group and Blackstone won the bidding for BankUnited, a troubled Florida lender with $13 billion in assets that was seized by the Federal Deposit Insurance Corp. late Thursday. They are believed to have beaten out a competing bid by Canada's Toronto-Dominion and Goldman Sachs...

In Failure Of BankUnited, Hope For Private Equity

 

The Ultimate Commodities ETF Guide

Commodities have received greater exposure in recent years thanks to a major bull rally in commodity prices coupled with new products designed to make these securities available to common stock investors. Many investors are familiar with precious metals and energy exchange-traded funds (ETFs), such as SPDR Gold Shares (GLD), PowerShares DB Oil (DBO), U.S. Oil (USO) and iShares Silver Trust (SLV), but they now have the option of investing in a variety of individual commodities and have a choice between several indexes that offer unique commodity weightings...

Yahoo! Finance: The Ultimate Commodities ETF Guide

 

Recession Turns Malls Into Ghost Towns

CHARLOTTE, N.C. -- Malls, those ubiquitous shopping meccas that sprang up in the 1950s, are dwindling in number, with many struggling properties reduced to largely vacant shells.

On the low-income east side of Charlotte, N.C., the 1.1-million-square-foot Eastland Mall recently lost a slew of key tenants, including a Dillard's and, next month, a Sears. Sales per square foot at the venue fell to $210 in 2008 from $288 in 2001.

As the recession alters American spending habits, traditional shopping malls like Eastland Mall are deteriorating at an accelerating pace.

The Metcalf South Shopping Center in Overland Park, Kan., is languishing after plans to redevelop it into an open-air shopping district fizzled. The stretch of shops that connects the two largest tenants -- a Sears and a Macy's -- stands mostly vacant, patrolled by security guards...

WSJ: Recession Turns Malls Into Ghost Towns

 

California Cities Irked by Borrowing Plan

California Gov. Arnold Schwarzenegger, in his efforts to find funds to balance the state budget, has proposed borrowing $2 billion from municipal governments over the next fiscal year, a tactic that is rankling local officials up and down the state.

Mr. Schwarzenegger is invoking a 2004 law that lets the state demand loans of 8% of property-tax revenue from cities, counties and special districts. Under the law, the state must repay the municipalities with interest within three years.

Administrators of already cash-strapped cities and counties said the loans would force even deeper cuts in services...

WSJ: California Cities Irked by Borrowing Plan

 

Florida's BankUnited fails, will cost FDIC $4.9B

BankUnited's failure marks 34th bank to close so far this year, will cost FDIC $4.9 billion

The federal seizure of struggling Florida thrift BankUnited FSB is expected to cost the Federal Deposit Insurance Corp. $4.9 billion, representing the second-largest hit to the FDIC's insurance fund since the financial crisis began felling banks last year.

The costliest was last year's seizure of California lender IndyMac Bank, on which the bank insurance fund is estimated to have lost $10.7 billion...

AP: Florida's BankUnited fails, will cost FDIC $4.9B

 

Mutual Funds Next Under Government Scrutiny?

As the Obama administration turns over rock after rock in its efforts to reform the financial services industry, it may be no surprise that it is actively discussing the creation of a regulatory commission to protect those who purchase financial products such as mortgages and mutual funds.

Such is the latest report from the Washington Post, which claims that senior policymakers, including Treasury Secretary Timothy Geithner and National Economic Council director Lawrence Summers, are meeting at the Treasury Department last evening to discuss the plans over dinner...

INN: Mutual Funds Next Under Government Scrutiny?

Thursday, May 21, 2009

 

MassMutual Adds Holistic Financial Planning Content to Its RetireSmart Academy Participant Website

MassMutual's Retirement Services Division recently added new holistic financial planning content to the MassMutual RetireSmart(SM) Academy, its participant education website. The site is an interactive online resource designed to create a more personal educational experience for its retirement plan participants.

MassMutual's RetireSmart Academy is accessible from the home page of The Journey(SM), MassMutual's participant web site. Here, participants can review account-specific information, perform transactions, and enjoy a fun and educational interactive experience that can help them make good financial decisions.

"Today more than ever, participants are looking to trusted sources for information -- not just about retirement planning and saving -- but also on all manner of financial topics," says E. Heather Smiley, chief marketing officer for MassMutual's Retirement Services Division...

PR Newswire: MassMutual Adds Holistic Financial Planning Content to Its RetireSmart(SM) Academy Participant Website

 

Insurers: Pain from Commercial Real Estate?

So far commercial real estate hasn't suffered much, but that could easily change, hitting the investments of life insurers especially hard

America's deteriorating commercial real estate picture has a special resonance for U.S. life insurers because of the approximately $310 billion, industrywide, that they've invested in commercial and multifamily mortgages...

Business Week: Insurers: Pain from Commercial Real Estate?

 

When Life Insurance Becomes a Liability

OWNING life insurance is supposed to make you feel more secure. These days, it’s often a source of anxiety instead.

People who are less wealthy suddenly need a bigger policy to protect their families. People whose policy investments have been battered face unexpected premium increases. And even those who feel adequately insured at affordable prices are worried about their insurers’ ability to meet financial commitments.

In addition to investment losses, premium increases have shocked many people...

NYT: When Life Insurance Becomes a Liability

 

Saving for Retirement With Variable Annuities

Variable annuities, extremely popular retirement investing vehicles, have taken a beating in this bear market. Companies like Hartford (Stock Quote: HIG) and Principal Financial (Stock Quote: PFG) have suffered tremendous losses. The underlying investments of variable annuities—known as mutual fund subaccounts—have lost value right along with the broader market. The one saving grace to owners of variable annuities have been what are known as guaranteed minimum income benefit or guaranteed minimum withdrawal benefit riders.

Despite their beating, variable annuities could still be a viable alternative in your retirement planning if you buy them for the right reasons...

The Street: Saving for Retirement With Variable Annuities

 

Annuity, life insurance policy purchaser J.G. Wentworth files for bankruptcy

J.G. Wentworth Inc., a financial services firm specializing in purchasing structured settlements, annuities and life insurance policies, filed for Chapter 11 bankruptcy protection Tuesday with hopes to reorganize.

The Bryn Mawr, Pa.-based company filed for bankruptcy in the U. S. Bankruptcy Court in Delaware.

The company sought acceptance of its plan from its lenders before what is called a prepackaged filing. More than 90 percent of the term lenders approved, the company said. J.G. Wentworth said the plan will allow it to substantially reduce its debt load while providing the enterprise with $100 million of new equity to support ongoing operations. Its operating units will continue to conduct business without interruption during the reorganization process, which is expected to be completed within roughly 30 days. The company said it also secured a commitment for debtor-in-possession financing to supplement its working capital and provide adequate liquidity during the proceedings...

BizJournals: Annuity, life insurance policy purchaser J.G. Wentworth files for bankruptcy

 

Genworth, Principal, Protective Life Among 13 Companies to Exit Equity-Indexed Annuities

Genworth Financial, Principal Financial Group and Protective Life Corp. are among the 13 companies that have exited the equity-indexed annuity market since the end of 2008, according to Sheryl J. Moore, president and chief executive officer of AnnuitySpecs.com, a firm that tracks sales data on the industry...

Trading Markets: Genworth, Principal, Protective Life Among 13 Companies to Exit Equity-Indexed Annuities

 

Letter: Charity-Gift Annuities Are Sound

The lengthy description of problems with two isolated charities in the article "Donors Find Gift Annuities Can Stop Giving" (Personal Journal, May 12) may grab your readers' attention, but it does immeasurable harm to charities that feed and shelter the homeless, educate our youth and provide innumerable services which enhance the quality of our lives...

Except for the isolated cases in your article, donors receive their annuity payments on time and as expected from reputable charities running legitimate programs...

WSJ: Charity-Gift Annuities Are Sound

Wednesday, May 20, 2009

 

Lump-Sum Distributions Become Harder to Get

The option of a lump sum on retirement is likely to disappear for a lot more workers this fall.

Lump sums used to be a fairly common option for workers enrolled in pension plans. It is becoming rarer, however, as declining stock values have sent pension assets plunging just as they have to meet more stringent funding requirements. (Pensions themselves, of course, are being offered to fewer workers.)

Some employees may slip through before Oct. 1, the deadline for businesses to update the funding status of their pensions. More companies are expected to be underfunded when the 2009 numbers are run...

WSJ: Lump-Sum Distributions Become Harder to Get

 

Investors take a shine to fixed and immediate annuities

Immediate fixed annuities and deferred fixed annuities are finding a growing market in the wake of the financial market meltdown. It’s no wonder. Their guaranteed payout rates are more than 8 percent and 5 percent, respectively at a time when the equity market is a seesaw of volatility.

New York Life, the leading seller of immediate fixed annuities, reported an 80 increase in immediately annuity sales in the first quarter of 2009 versus the prior year. Chris Blunt, executive vice president at New York Life, says fixed immediate annuity sales are soaring because people want secure income—and that should continue. Over at MetLife, the jump in sales of immediate fixed annuities is even more astounding: First quarter sales (deposits) totaled $3.6 billion, up from just $272 million a year ago. That translates into a 12,000 percent increase...

Registered Rep: Investors take a shine to fixed and immediate annuities

 

Allstate tells Treasury 'thanks, but no thanks' on TARP cash

This is the kind of ingrate a taxpayer should appreciate: Insurance giant Allstate Corp. today turned down the Treasury's offer of TARP capital.

Just last week, after months of industry lobbying, the government approved six major life insurance companies for capital infusions under the Troubled Asset Relief Program.

But one of the six -- Ameriprise Financial Inc. -- quickly said it no longer was interested. Another, Prudential Financial Inc., sounded noncommittal in a statement Friday, saying only that it was "evaluating all options."

Now, Allstate says it doesn’t want the money...

LA Times: Allstate tells Treasury 'thanks, but no thanks' on TARP cash

 

Banks Use Life Insurance to Fund Bonuses

Controversial Policies on Employees Pay for Executive Benefits, Help Companies With Taxes

Banks are using a little-known tactic to help pay bonuses, deferred pay and pensions they owe executives: They're holding life-insurance policies on hundreds of thousands of their workers, with themselves as the beneficiaries.

Banks took out much of this life insurance during the mortgage bubble, when executives' pay -- and the IOUs for their deferred compensation -- surged, and banking regulators affirmed the use of life insurance as a way to finance executive pay and benefits.

Bank of America Corp. has the most life insurance on employees: $17.3 billion at the end of the first quarter, according to bank filings. Wachovia Corp. has $12 billion, J.P. Morgan Chase & Co. has $11.1 billion and Wells Fargo & Co. has $5.7 billion. (Wells Fargo acquired Wachovia at the end of last year.)...

WSJ: Banks Use Life Insurance to Fund Bonuses

 

Is It Safe? Genworth's Troubles Still Lurking

Genworth's (GNW) stock has sunk 78% in the past year, almost twice that of the SNL underwriter's index. The company's announcement in February that it was suspending its dividend was the final nail in the coffin.

With insurers' shares rebounding, is Genworth safe to buy?

The first-quarter loss of $469 million didn't inspire confidence. Return on average equity, at 0.65%, was only better than Prudential's(PRU Quote) and Hartford Financial Services'(HIG Quote) for life insurance companies...

Street: Is It Safe? Genworth's Troubles Still Lurking

 

The 22 Strongest Life Insurance Companies

Citigroup(C Quote) and Principal Financial Group(PFG Quote) units are among the country's 22 strongest life insurers, suggesting they may have an edge in attracting customers concerned about the stability of financial companies.

Topping the list of life insurers with A-plus ratings that earned annual life premiums of $100 million or more and representing at least 10% of their business were American Family Life, State Farm Life, State Farm Life & Accident and Country Life. Primerica Life Insurance, a Citigroup division, and Principal Life Insurance, part of Principal Financial Group, maintained their A-minus ratings, according to a quarterly review of financial strength ratings by TheStreet.com Ratings...

Street: The 22 Strongest Life Insurance Companies

 

600 Banks Fail Stress Test

The Wall Street Journal has run its own version of the the Fed's stress test on 900 small and midsize institutions, and it claims they'll see losses of about $200 billion by the end of next year.

In such a scenario, at least 600 of the banks would see their capital levels shrink to a level that would be deemed unsafe by regulators.

The biggest culprit? You guessed it, commercial real estate, which could contribute about $100 billion in losses. Continued home loan losses is next, at about $49 billion.

WSJ: "They are in just much worse shape" than the big banks, says Terry McEvoy, an Oppenheimer & Co. analyst who reviewed the Journal's analysis. "There is a lot less earnings power at these banks."

The Fed this month estimated that the 19 stress-tested banks could face losses of $599 billion if the agency's gloomiest economic scenario comes true...

TechTicker: 600 Banks Fail Stress Test

 

The Madoff Affair: Behind the Scenes

...MainStreet: What do you think is the most important piece of information the average investor should take away from this story?

Smith: We were surprised all along at how so many people gave their money over to Madoff or to a feeder fund and then asked very few questions. Those that did were rebuffed by Madoff's staff, but they left their money in his hands. I think ordinary investors should make sure they understand the statements they're getting and the strategy used to generate profits. If it's a secret proprietary strategy, then an investor should be aware of the risk. A track record is nice but it is not hard to find managers who have succeeded for years only to falter badly. If 90% of professional money managers fail to beat the market over the long run, then it seems an investor should either park their money in an index fund or really know what risks they are taking. Ask questions. And make sure you understand the answers. Madoff's investors seemed only to focus on that bottom line.

What are some red flags investors should look out for?

A big red flag, which we didn't get to explore in the piece, was the fact that Madoff was his own custodian, broker and investment advisor with a tiny unknown accounting firm doing his audits. He was accountable to no one but himself. Any investor should steer clear of such a set-up. A third party should hold your assets, not the investment advisor. That alone should insure that someone other than your advisor is verifying the trading...

MainStreet: The Madoff Affair: Behind the Scenes

Tuesday, May 19, 2009

 

U.S. Consumers Prefer to Buy Insurance Through Agents Despite Ability to Buy Products Online, Accenture Survey Finds

Three-quarters of U.S. consumers prefer buying insurance products through agents and other trusted sources, but younger and higher-income consumers are more inclined to purchase products via the Web than through an agent and are more inclined to switch insurers, according to findings of a survey of more than 1,000 U.S. consumers by Accenture.

U.S. Consumers Prefer to Buy Insurance Through Agents Despite Ability to Buy Products Online, Accenture Survey Finds
Source: Business Wire

 

U.S. Retirement Market Totals Over $24 Trillion, According to Novarica

As workers across America are being squeezed by rising costs for health care and other employer-sponsored insurance benefits, many companies have reduced or even eliminated matching contributions for retirement savings plans. For America's workers, it's become a takeaway economy.

U.S. Retirement Market Totals Over $24 Trillion, According to Novarica
Source: Insurance News Net

 

Allianz Surveys the 2009 Market and Sees a Few Small Signs of Hope

The worldwide financial crisis will continue to churn up the banking sector through 2009, but its impact on the insurance industry remains unclear.

Sector giants such as American International Group and Swiss Re took a pounding as the crisis unfolded, but not in their core insurance and reinsurance operations. Rather, they suffered from over-extension into trading of derivatives and credit instruments.

Allianz Surveys the 2009 Market and Sees a Few Small Signs of Hope

 

IRS Addresses Secondary Market For Life Insurance

The secondary market for life insurance has been growing rapidly, and of course the government wants its piece of the new industry. The IRS recently issued a couple rulings in an effort to clarify the tax treatment of these transactions. The law firm Morrison & Foerster LLP helps explain these new rulings in their article below from JD Supra.

Over the years, a substantial secondary market in life insurance contracts has developed, giving individuals owning these contracts what may be an important source of income, and allowing investors to gain exposure to a new asset class. Investors may purchase policies directly or through an investment vehicle such as a limited partnership. The Internal Revenue Service (“IRS”) has now issued two published rulings that will help clarify the tax treatment of transactions in this market. The rulings clarify the tax treatment of both the original owner of the contract and the investor in the secondary market. The rulings do not address the special rules applying to viatical settlements in which a policy is sold by certain terminally ill or chronically ill individuals.

Morrison & Foerster LLP: IRS Addresses Secondary Market For Life Insurance

 

Life Insurers Roll Out End-Of-Life Benefits

For more and more group life insurers, the benefits at death are moving well beyond just a lump sum.

Legal help for probate and professional help for funeral planning are among the services being bundled into group coverage packages by a growing number of companies. The Hartford Financial Services Group, Inc., Prudential Financial Inc. (PRU), ING Employee Benefits, a subsidiary of ING Groep NV (ING), and MetLife, Inc (MET) are among those joining the trend...

WSJ: Life Insurers Roll Out End-Of-Life Benefits (Subscription required)

 

AIG plans to spin off Asian life insurance unit

American International Group Inc. plans to spin off its Asian life insurance unit in an initial public offering to help repay billions of dollars in U.S. government loans.

Shares of American International Assurance Co., known as AIA Group, will be traded on an Asian exchange, though no information was provided about which exchange or the size of the offering. Those details will be based on market conditions and regulatory approval, the company said late Sunday in a statement.

...Last week, Dow Jones Newswires said AIG was planning to raise between $5 billion to $10 billion through a sale of between one-quarter and one-third of AIA Group...

AP: AIG plans to spin off Asian life insurance unit

 

Jackson Annuity Sales Rose 8 Percent

Jackson National Life Insurance Co., a Lansing, Mich., unit of London's Prudential PLC, has announced that its annuity sales grew 8% in the first quarter, to $2.6 billion, from a year earlier.

First-quarter annuity net inflows increased 21%, to $1 billion, due in part to an 81% increase in traditional fixed annuity sales, the insurance company announced Thursday.

Jackson National's first-quarter retail sales and deposits remained steady, at $2.7 billion, from a year earlier...

Financial Planning: Jackson Annuity Sales Rose 8 Percent

 

California eyes Stanley Chais' role in Madoff debacle

Investigators from Atty. Gen. Jerry Brown's office are said to be looking into the former Beverly Hills money manager's relationship with the disgraced financier.

The California attorney general's office has launched a preliminary investigation into the role that former Beverly Hills money manager Stanley Chais played in funneling millions of dollars into the giant Ponzi scheme run by convicted felon Bernard L. Madoff, said people familiar with the matter.

Investigators from Atty. Gen. Jerry Brown's office are looking into Chais' relationship with Madoff and whether Chais misrepresented to investors that he was placing their money with the disgraced financier...

LA Times: California eyes Stanley Chais' role in Madoff debacle

 

Personal Finance Startup Mint Wants To Sell Your Money Trail

Personal finance startup Mint.com is growing fast: Founder and CEO Aaron Patzer tells Bloomberg the company more than doubled its revenue in Q1 over the prior quarter. But to grow sales tenfold this year, the company will need more revenue streams than just referring customers to financial services.

One idea: Selling anonymous financial information, Patzer tells Bloomberg...

Business Insider: Personal Finance Startup Mint Wants To Sell Your Money Trail

 

Hartford CEO: Will Not Sell P/C And Life Insurance Operations

Days after being approved to receive $3.4 billion through the Treasury's TARP Capital Purchase Program, Hartford Financial Services Group Inc. (HIG) announced that it will keep its U.S. property/casualty and life businesses.

The announcement, in an employee memo signed by Chief Executive Ramani Ayer, comes after months of speculation that the company was shopping its life insurance and property/casualty operations in order to bolster its faltering capital...

CNN Money: Hartford CEO: Will Not Sell P/C And Life Insurance Operations

 

Variable Annuities With Guarantees Lose Appeal

Variable annuities with guaranteed payouts used to be attractive to retirees in their fifties and sixties who needed to start taking withdrawals right away but also wanted to benefit from long-term stock-market growth with some downside protection (see Savings Guarantees You Can Trust for more information). But many insurers cut back on these guarantees and increased their fees when they introduced new contracts May 1...

Kiplinger: Variable Annuities With Guarantees Lose Appeal

 

Sales of indexed annuities rise over last year

Total sales of indexed annuities were $7 billion in the first quarter, up 22.8 percent from last year, according to the latest Advantage Index Sales and Market Report. Sales, however, were down 2.1 percent from the fourth quarter of 2008...

..."Unfortunately, the supply of annuities cannot keep up with the demand right now, because annuities are so capital-intensive," she said.

Nearly 57 percent of all indexed annuity sales continue to come through Iowa-domiciled companies, the report shows. Aviva holds the No. 1 position in indexed annuities and indexed life sales...

Des Moines Register: Sales of indexed annuities rise over last year

Monday, May 18, 2009

 

Goldman Blesses BofA

Whatever Bank of America (BAC) has been doing, the message from Goldman Sachs is a simple one: keep it up.

Goldman lobbed the controversial banking concern’s shares onto its conviction buy list, saying BofA is in the midst of another solid mortgage and capital-markets quarter. It set its earnings estimate to a high-on-the-street 25 cents a share. Consensus says the bank will barely be profitable, though the range of a loss of 32 cents to a profit of 22 cents looks unreliably wide...

Barron's: Goldman Blesses BofA

 

AIG launches IPO process for Asia crown jewel

AIG is to speed up plans to list its Asian subsidiary through an IPO that could raise more than $4 billion, as the bailed-out U.S. insurer seeks to raise cash to pay back government loans.

The IPO would help AIG repay some of the $180 billion the U.S. government has plowed into what was once the world's biggest insurer, and allow the profitable Asia life insurance subsidiary, American International Assurance Co Ltd (AIA), to break from its ailing parent.

The at least $4 billion initial public offering, based on targets set by AIG executives, would make it the largest Hong Kong IPO since China Citic Bank Corp (0998.HK) raised $4.2 billion in April 2007, according to Thomson Reuters data...

Reuters: AIG launches IPO process for Asia crown jewel

 

A.M. Best Downgrades Issuer Credit Ratings of Primerica Life Insurance Company and Its Subsidiaries

A.M. Best Co. has affirmed the financial strength rating (FSR) of A+ (Superior) and downgraded the issuer credit ratings (ICR) to "aa-" from "aa" of Primerica Life Insurance Company (PLIC) (Boston, MA) and its subsidiaries, National Benefit Life Insurance Company (New York, NY) and Primerica Life Insurance Company of Canada (Mississauga, Ontario) (collectively known as Primerica Life). The outlook for all ratings is stable. These companies are currently indirect insurance subsidiaries of Citigroup, Inc. (Citigroup) (Delaware) (NYSE: C).

A.M. Best Downgrades Issuer Credit Ratings of Primerica Life Insurance Company and Its Subsidiaries
Source: Insurance News Net

 

Your Client Is Under-Insured. It's Your Job to Make Sure They Know It

Every working American is covered by Social Security for disability and many feel that is adequate. At least their actions indicate that this is the case, since the majority of workers do not have any coverage beyond what is provided by the government.

Your Client Is Under-Insured. It's Your Job to Make Sure They Know It.
Source: Life Insurance Selling

 

The Hartford Enhances Group Life Insurance Coverage By Offering New Funeral Planning Services

As workers across America are being squeezed by rising costs for health care and other employer-sponsored insurance benefits, many companies have reduced or even eliminated matching contributions for retirement savings plans. For America's workers, it's become a takeaway economy.

The Hartford Enhances Group Life Insurance Coverage By Offering New Funeral Planning Services
Source: Trading Markets

 

Joseph Cassano: the man with the trillion-dollar price on his head

Joseph Cassano is the multimillionaire trader accused of bringing down the insurance giant AIG — and with it the world’s economy. So is he a criminal, an incompetent or a scapegoat?

They were frightened for a long time, then suddenly they were angry. For millions of Americans, anxiety about a jobless, debt-laden future turned to disbelief when it emerged that AIG, the company at the centre of the world’s financial crisis, was handing out £300m in bonuses. It was the superpower’s Sir Fred moment. Just as Britain reacted with fury to the disclosure that Sir Fred Goodwin’s pension pot had been doubled as his bank neared collapse, so the US was shocked. The death threats came soon after. “I want them dead!” said one of a stream of messages that caused AIG staff to travel in pairs, park in well-lit areas, and dial 911 if followed. “I want their spouses dead! I want their children dead! I want their children’s children dead! I want the earth upon which they have walked salted so nothing will ever grow again!”

This was one of the greatest bailouts in history, after the biggest corporate loss in history, during the most serious challenge to world stability since the 1962 Cuban missile crisis. And here was AIG, the recipient of so much taxpayers’ money that the cheques exceed the value of the gold reserves in Fort Knox, paying bonuses to the very people who engineered the catastrophe.

Protesters toured the posh houses on Long Island Sound, an estuary northeast of New York City, with letters for AIG executives describing the plight of homeowners. But they were in the wrong place. Because the man who knows most about AIG’s troubles lives in a stucco-fronted house 3,000 miles away. Some call him Patient Zero: the virus that infected the world financial system was transmitted from a genteel square near Harrods. If you wait patiently in Knights-bridge you will see him, and he appears not to be a risk-taking type. He puts on his red crash helmet and cycles greenly off across the city, politely declining to comment on global calamities. This does not look like a person waiting at the curtains for the arrival of the FBI.

Can one man in London really be to blame for the collapse of capitalism?

Times Online: Joseph Cassano: the man with the trillion-dollar price on his head

 

New Tax Proposals Target Life Insurers

The Obama administration is seeking $12.8 billion in new tax revenue from life insurers over the next decade, even as the federal government offers the struggling sector bailout funds.

The provisions in the Treasury Department tax plan released last week would restrict several products that have drawn attention from regulators in recent years because of the way they use life-insurance policies as vehicles for minimizing taxes on investments.

The proposals would restrict several tax breaks received by purchasers of insurance or insurance companies themselves, and also require more information reporting in some cases. Industry representatives say the changes would hit sales in at least one significant area of the business, corporate-owned life insurance...

WSJ: New Tax Proposals Target Life Insurers

 

COMPLIANCE WATCH: Industry Frets Over SEC Custody Proposal

A new Securities and Exchange Commission proposal may not necessarily strengthen protections for assets overseen by investment advisers, according to securities lawyers and financial adviser groups.

The SEC proposed Thursday to require investment advisers who hold or have access to customer funds to undergo annual exams to confirm the money actually exists. These changes come in response to massive investment scams by Bernard Madoff and others, and public outcry over lax oversight...

WSJ: COMPLIANCE WATCH: Industry Frets Over SEC Custody Proposal (Subscription required)

 

Does Your Adviser Make the Grade?

Until last fall, Pam Nintrup thought the financial adviser she had hired two and a half years before was doing a good job. He'd consolidated her and her husband's scattered accounts onto one statement and run computer scenarios to determine whether her goal of retirement by age 60 was achievable. It was, he said. He then suggested a stock-heavy mix of investments to help Nintrup, 57, meet that goal.

But with her portfolio down more than 40% since last December, Nintrup's early-retirement plans are out the window, and doubts about her counselor are mounting. Why wasn't her money invested more conservatively given her imminent retirement? Is the adviser's explanation -- that bonds didn't cushion the stock losses as well as anticipated -- good enough? Why should she stick with the same plan, as he recommends, when it has done so poorly?

Like Nintrup, millions of investors are questioning whether their own advisers have done the right thing...

CNBC: Does Your Adviser Make the Grade?

 

MassMutual weighs future in VA marketplace

Firm has pulled back on variable annuities in recent months

Following the departure of a major annuities expert and the elimination of some variable annuity riders, Massachusetts Mutual Life Insurance Co. is mulling the future of its role in the VA marketplace.

“The challenge for the next few years, given the changing environment we're in today, is to figure out how the ideas fit in the context of products that agents and [representatives] want to use, and fit the needs of the consumer,” said Drew Dickey, a senior vice president and head of the retirement income business at the Springfield, Mass.-based carrier. “We're trying to assess [whether variable annuities will] be an evolutionary strand of product that dies off or mutates, and what the opportunities are, going forward, for different ideas that are more prudent for a highly rated company that needs to maintain prudent risk posture...”

MassMutual weighs future in VA marketplace

 

A good time to add veteran brokers

A few weeks ago Craig Shaver, a veteran financial adviser at UBS Securities in downtown Minneapolis, arrived at work just as he has for 20 years.

He was greeted by about a dozen colleagues who handed him a hockey stick and showed him to his office.

His new office at RBC Financial.

The hockey stick is the office-jock metaphor for RBC, Canada's largest financial firm and a stable company in a world of giant basket cases. The stick was signed by a bunch of Shaver's former colleagues who also left UBS, whose Swiss parent is struggling to recover from steep investment losses...

Star-Tribune: A good time to add veteran brokers

 

Will AIG Ever Pay Us Back?

BNET.com Columnist Ed Leefeldt Weighs In On The Issue For 60Minutes.com

Ed Liddy, the man who took over the reins of AIG ?- the failed insurance giant to which the government has made $180 billion available in aid ?- speaks to Steve Kroft about the gargantuan task ahead. | Share/Embed

As we taxpayers poured $180 billion into American International Group, the insurance colossus brought down by a rogue derivatives trading division, we were told that the company’s main lines of business were fundamentally strong.

AIG’s core property, casualty and life insurance units were said to be rock solid assets that could in a reasonable amount of time earn enough money to pay back the rescue loan. However, that promise never took into account the damage the rescue loan itself would to AIG's reputation. Now the taxpayers' payday looks more remote than ever...

CBS: Will AIG Ever Pay Us Back?

 

AIG to Spin Off Asian Life Unit

American International Group (AIG Quote) plans to spin off its Asian life insurance unit, American International Assurance, and seek a public listing on an Asian stock exchange for the group.

"We continue to consider all strategic options through a robust, structured and disciplined process. At this stage, we believe that a public listing for AIA would be in the best interests of all stakeholders, including U.S. taxpayers, policyholders, employees and distribution partners," said Edward Liddy, chairman and CEO, in a statement late Sunday.

AIG said the unit has more than 20 million customers in Asia, 250,000 agents and assets of more than $60 billion...

The Street: AIG to Spin Off Asian Life Unit

 

Local Investors Picking Up Life Insurance Co.’s Assets

Warmington Homes Expands Business to Fee Management; Faris Lee Opens on East Coast

A slew of apartment complex sales by Milwaukee’s Northwestern Mutual Life Insurance Co. has proven to be a big source of business for local investors this month.

Laguna Niguel-based Raintree Partners LLC recently bought 204 apartments in Silicon Valley from an affiliate of Northwestern. It’s the first acquisition for Raintree, which was formed in 2007 and has $200 million in funding.

The deal—for the Trellis Square Apartment Homes in Sunnyvale—traded hands for $38.3 million, or about $188,000 per square foot. The property’s 95% full...

OCBJ: Local Investors Picking Up Life Insurance Co.’s Assets (free registration required)

Friday, May 15, 2009

 

Why Aren’t More U.S. Consumers Using Insurance Comparison Shopping Sites?

Every year, Forrester surveys U.S. adults about their online and cross-channel (call center, in-person, mail) shopping behavior. In 2008, we found that more than 18 million U.S. consumers applied for, or purchased, auto insurance via the Web (versus 9 million in 2007). Surprisingly, only 9% U.S. online adult consumers used a comparison Web site when researching auto insurance. In comparison, more than 58% of UK online adult shoppers used a comparison site to purchase auto insurance in 2008.

So why aren’t more U.S. consumers using Insurance Comparison Shopping Sites? ...

Insurance Networking: Why Aren’t More U.S. Consumers Using Insurance Comparison Shopping Sites?

 

Progressive Moving Forward

Sandler O'Neill upgraded the auto insurer, saying it sees earnings upside.

WE ARE UPGRADING Progressive (ticker: PGR) to Buy from Hold and raising our price target to $20 from $16 following the release of April operating earnings of 17 cents per share compared with our 11 cents estimate, largely due to better-than-expected underwriting results of six cents per share due to lower losses and loss adjustment expense (LAE) (four cents per share after tax) and lower expenses (two cents per share).

We are raising both our 2009 and 2010 earnings-per-share estimates to $1.60 from $1.30. Consensus is expecting $1.48 in 2009 and $1.41 in 2010. Book value rose to $6.70 from $6.32 in March...

Barrons: Progressive Moving Forward

 

SEC Proposes Rule Amendments to Increase Investor Protection With Investment Advisors

Following the oversight failures with the Bernard Madoff Ponzi scheme, the SEC is proposing rule amendments that seek to better regulate investment advisers and restore investor confidence.

The SEC is proposing an annual surprise exam of investment advisers performed by an independent public accountant to verify client assets exist.

SEC Proposes Rule Amendments to Increase Investor Protection With Investment Advisors
Source: Insurance News Net

 

Annuities Can Be A Boon for Retirement

If you've already taken the steps to prepare for retirement and are looking for a way to supplement your 401(k) and/or IRA, an annuity might be an investment vehicle you should consider.

Annuities Can Be A Boon for Retirement
Source: Wausau Daily Herald

 

Term Life an Answer to the Annuity-Shortage Blues

Limited availability of annuity products is a real issue right now. As carriers streamline their distribution, tighten underwriting, cut commissions (and incentive trips) or pull products off the market, independent producers are left with an abundance of new clients but a shortage of appropriate products.

Term Life an Answer to the Annuity-Shortage Blues
Source: Life Insurance Selling

 

Insurer to Treasury: No Thanks on TARP

Treasury is offering bailout funds to big insurance companies, but some of the responses have been less than enthusiastic.

The government cleared six big life insurance firms with banking subsidiaries to receive $22 billion in federal rescue funding this week. The goal: ease investor worries about the health of the sector.

Insurer to Treasury: No Thanks on TARP
Source: CNN Money

 

Lawmaker says Obama tax deferral off base

President Barack Obama should tackle deferral of corporate taxes within the context of broader tax reform and not separately, the chairman of a key U.S. congressional panel said Thursday.

"They need to distinguish between deferral and avoidance," said Rep. Richard Neal, D-Mass., who chairs the subcommittee on taxes of the tax-writing Ways and Means Committee in the House of Representatives, in an interview...

Business Insurance (Reuters): Lawmaker says Obama tax deferral off base

 

The 7 biggest insurance agency business busters

The combination of higher premiums and a treacherous economy offers a minefield of challenges for insurance agents. With stricter underwriting, for example, they may find themselves trying to explain to long-time clients why costs are way up or why coverage was declined.

Clearly, it’s no longer business as usual. Who can doubt that the economic storm will pass without doing serious damage? However, what will harm insurance agencies the most in the current environment will not be outside forces, but what goes on inside the organization.

Here are seven of the biggest insurance agency business busters — any of which can do irreparable harm...

Life Insurance Selling: The 7 biggest insurance agency business busters

 

China's yuan 'set to usurp US dollar' as world's reserve currency

The Chinese yuan is preparing to overtake the US dollar as the world's reserve currency, economist Nouriel Roubini has warned.

Professor Roubini, of New York University's Stern business school, believes that while such a major change is some way off, the Chinese government is laying the ground for the yuan's ascendance.

Known as "Dr Doom" for his negative stance, Prof Roubini argues that China is better placed than the US to provide a reserve currency for the 21st century because it has a large current account surplus, focused government and few of the economic worries the US faces...

Telegraph (UK): China's yuan 'set to usurp US dollar' as world's reserve currency

 

Obama Says U.S. Long-Term Debt Load ‘Unsustainable’

President Barack Obama, calling current deficit spending “unsustainable,” warned of skyrocketing interest rates for consumers if the U.S. continues to finance government by borrowing from other countries...

...Earlier this week, the Obama administration revised its own budget estimates and raised the projected deficit for this year to a record $1.84 trillion, up 5 percent from the February estimate. The revision for the 2010 fiscal year estimated the deficit at $1.26 trillion, up 7.4 percent from the February figure. The White House Office of Management and Budget also projected next year’s budget will end up at $3.59 trillion, compared with the $3.55 trillion it estimated previously.

Two weeks ago, the president proposed $17 billion in budget cuts, with plans to eliminate or reduce 121 federal programs. Republicans ridiculed the amount, saying that it represented one-half of 1 percent of the entire budget. They noted that Obama is seeking an $81 billion increase in other spending...

Bloomberg: Obama Says U.S. Long-Term Debt Load ‘Unsustainable’

 

ING names new CFO of US annuity business

ING NV said Thursday that Michael Smith will join the Dutch bank and insurer as chief financial officer and chief insurance risk officer of its U.S. annuity business.

Smith, 45, most recently served as head of profitability and risk management for Lincoln Retirement Solutions at Lincoln Financial Group. He replaces Michel Perreault, former chief insurance risk officer who left the company earlier this year for Genworth Financial Inc...

Forbes: ING names new CFO of US annuity business

 

The Hartford gets $3.4 billion Treasury investment

Insurance company The Hartford Financial Services Group Inc. said Thursday it received preliminary approval for a $3.4 billion investment by the Treasury Department under the government's $700 billion financial industry rescue program...

...Shares of The Hartford rose $2.19, or 17.4 percent, to close Thursday at $14.75. The stock was up another $1.10, or 7.5 percent to $15.85 in aftermarket electronic trading.

Last week, The Hartford posted a a $1.2 billion first-quarter loss, due mostly to a big charge related to reduced expectations for profit from its variable annuity business...

Forbes: The Hartford gets $3.4 billion Treasury investment

 

U.S. Slates $22 Billion for Insurers From TARP

The Treasury Department will make federal bailout funds available to a number of U.S. life insurers, acting on the embattled sector's long-running effort to get government help.

The Treasury is prepared to inject up to $22 billion into the insurers under the rescue plan launched last fall as the Troubled Asset Relief Program, said a person familiar with the matter...

WSJ: U.S. Slates $22 Billion for Insurers From TARP (Subscription required)

 

Jackson National overall annuity sales rose, driven by fixed products

But sales of variable annuities slipped in the first quarter

First-quarter overall annuity sales rose 8% to $2.6 billion at Jackson National Life Insurance Co. year over year, propelled by large gains in traditional fixed-annuity sales.

Annuity net flows, which encompass total premium minus surrenders, exchanges and annuitizations, totaled $1 billion, up 21% from a year earlier...

Investment News: Jackson National overall annuity sales rose, driven by fixed products

Thursday, May 14, 2009

 

Kanjorski Calls for Federal Oversight of Insurance

The chairman of an influential House subcommittee said the federal government, not the states, should have primary responsibility for overseeing the insurance industry.

Representative Paul Kanjorski, a Pennsylvania Democrat, said the need for mandatory federal regulation is illustrated by the current economic crisis and the $182.5 billion taxpayer bailout of American International Group Inc...

Bloomberg: Kanjorski Calls for Federal Oversight of Insurance

 

S&P: Banking Crisis Could Go on for Another 3 or 4 Years

Despite the cautious optimism creeping into the financial markets, in light of what some believe are better-than-expected results from the government stress testing of 19 large banks, Standard & Poor’s Ratings Services believes that “banks are far from a recovery, and the banking crisis has merely entered a new phase.”

"although our analytical time horizon for losses extends only through 2010 … there’s nothing to say that this banking crisis can’t go on for another three or four years." - Tanya Azarchs, managing director at Standard & Poor’s

One thing is clear, however: banks will have a tough time surviving unless they have “more capital than even Basel envisioned,” according to Azarchs... The Federal Reserve Board’s stress testing, the results of which were announced May 7, found that that 10 of the 19 largest banks need a total of $75 billion in capital to maintain at least 4% of common equity Tier 1 capital if the environment becomes a lot more adverse than experts currently expect...

Seeking Alpha: S&P: Banking Crisis Could Go on for Another 3 or 4 Years

 

California: State Farm to lower auto insurance rates

About 3.3 million California customers will see their annual premiums fall by approximately $75... Automobile insurance rates are going down for about 3.3 million drivers who do business with California's biggest insurer, State Farm.

Rates will drop by 8% for a total savings of $219 million, said Rand Harbert, the company's senior vice president for California, and state Insurance Commissioner Steve Poizner at an event in Los Angeles this morning...

LA Times: State Farm to lower auto insurance rates

 

How To Sniff Out A Liar

There are plenty of dangerously skilled liars--and not just the Bernie Madoffs and Jeffrey Skillings of the world. Indeed, under the right (or wrong) circumstances, we're all guilty fibbers.

According to an oft-cited 1996 University of Virginia study led by psychologist Bella DePaulo, lying is part of the human condition. Over the course of one week, DePaulo and her colleagues asked 147 participants, aged 18 to 71, to record in a diary all of their social interactions and all of the lies they told during them. On average, each person lied just over 10 times, and only seven participants claimed to have been completely honest...

Forbes: How To Sniff Out A Liar

 

What Social Security's Underfunding Means for Your Retirement

Social Security and Medicare's annual checkup revealed that the recession and longer life expectancies are taxing the health of the entitlement system. The Social Security Board of Trustees report found that program costs will exceed tax revenues in 2016, a year sooner than predicted in last year's report. The trust fund will be exhausted in 2037, four years sooner than the 2008 estimate. Here's a look at how the projections could affect your retirement plans.

What Social Security's Underfunding Means for Your Retirement
Source: U.S. News & World Report

 

Stress-Test Your Retirement

The economy is in shambles, and the stock market is in the tank. If you're entering the waning years of your career - or if you've already retired - that's more than enough to suck the joy out of retirement. If you let it.

Stress-Test Your Retirement
Source: CNN Money

 

Disability Income Insurance: A Resiliency Factor In the Recovery Process

No one expects to acquire a disability, through either a sudden catastrophic accident or a debilitating medical condition. Yet, all too often, people are faced with a disability due to circumstances beyond their control.

Disability Income Insurance: A Resiliency Factor In the Recovery Process
Source: Life Insurance Selling

 

More Workers Move 401(k) Savings to Stable-Value Fund Investments

More workers move 401(k) savings to stable-value fund investments; But experts warn fixed-income vehicles still carry some risks

Stable-value funds are the safest investment option available to 401(k) plan participants despite two funds' recent problems, but plan sponsors still should exercise caution in selecting their funds, observers say.

More Workers Move 401(k) Savings to Stable-Value Fund Investments
Source: Insurance News Net

 

Merrill Lynch Hires Financial Advisers

Merrill Lynch Global Wealth Management, a unit of Bank of America Corp. (BAC), recently hired eight financial advisers from Citigroup Inc.'s (C) Smith Barney unit and added additional brokers from UBS AG (UBS) and Wells Fargo & Co. (WFC).

The moves come as Merrill Lynch has ramped up its recruiting efforts over the past few weeks. The firm is currently offering one of the highest-paying deals in the industry for top-producing advisers...

WSJ: Merrill Lynch Hires Financial Advisers (Subscription required)

 

Allianz 1Q Net Falls; No Concrete 09 Guidance

Allianz SE (AZ) Wednesday reported sharply lower first-quarter net profit, pressured by write-downs on financial investments, claims costs and a charge related to its sale of Dresdner Bank.

Europe's largest primary insurer by market capitalization gave no concrete earnings target for 2009, saying that the environment for financial services companies will remain "challenging" and couldn't rule out further impairments or credit defaults on corporate bonds...

WSJ: Allianz 1Q Net Falls; No Concrete 09 Guidance (Subscription required)

 

Aegon Slips To 1Q Loss, Cost Reductions On Track

Dutch life insurance and pensions provider Aegon NV (AEG) said Thursday it was on track to deliver the company's targeted cost reductions in 2009 and that it had released additional capital despite falling to a net loss in the first quarter.

The company made a net loss of EUR173 million compared with a net profit of EUR153 million in the first quarter of 2008, pressured in part by fresh write-downs on mortgage securities...

WSJ: Aegon Slips To 1Q Loss, Cost Reductions On Track (Subscription required)

 

A.M. Best Places Ratings of Forethought Life Insurance Company Under Review With Negative Implications

A.M. Best Co. has placed the financial strength rating of A- (Excellent) and issuer credit rating “a-” of Forethought Life Insurance Company (FLIC) (Indianapolis, IN) under review with negative implications.

These actions reflect A.M. Best’s concern with FLIC’s decline in statutory capitalization, net loss on a statutory and GAAP basis, its high unrealized loss position and significant level of intangibles relative to its GAAP equity.

The ratings have been placed under review following discussions with FLIC’s ultimate parent company, Forethought Financial Group, Inc. (FFG), about significant new capital raising initiatives. These efforts are expected to improve the capital position of the organization to support growth and offset any additional investment losses. While A.M. Best expects tangible progress in these efforts in the near term, the ratings of FLIC will be negatively impacted should the capital raising efforts be unsuccessful...

BusinessWire: A.M. Best Places Ratings of Forethought Life Insurance Company Under Review With Negative Implications

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