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Wed Dec 5, 2012, 04:25 AM

 

Association of Insurance Commissioners approves lower reserve rules (= more speculation)

During the off-hours on Sunday, when few people were willing to ruin whatever remained of their weekend, when even astute observers weren’t supposed to pay attention, the National Association of Insurance Commissioners approved new rules that would allow life insurance companies to lower their reserves for future claims.

Executives claimed that they could put that capital to “more productive uses,” such as blowing it on stock buybacks and acquisitions or plowing it into subprime-based CDOs or Greek sovereign debt, or whatever, to goose their paper returns—having already forgotten all about the financial crisis...

Read more at http://www.nakedcapitalism.com/2012/12/wolf-richter-new-rules-for-life-insurers-future-generations-have-to-deal-with-the-financial-carnage.html#i8EhsolKYDlFI0oy.99

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Reply Association of Insurance Commissioners approves lower reserve rules (= more speculation) (Original post)
HiPointDem Dec 2012 OP
TexasTowelie Dec 2012 #1
jtuck004 Dec 2012 #2
tclambert Dec 2012 #3
Yo_Mama Dec 2012 #4
fasttense Dec 2012 #5
Baitball Blogger Dec 2012 #6
Festivito Dec 2012 #7
Octafish Dec 2012 #8

Response to HiPointDem (Original post)

Wed Dec 5, 2012, 04:50 AM

1. Don't forget the golden parachutes that the CEOs get while they squeeze every last cent out of the

company.

While I admit that there are numerous reasons to have insurance, I'm ashamed as a former regulator to admit that it is just a form of legalized gambling. And to anger more conservatives, it's a form of socialism as well!

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 05:22 AM

2. This is what caused millions of seniors and other policy holders to be at risk in AIG's failure,


along with trillions of government money flowing to the banks and bondholders..

We keep seeing the same things, over and over.

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 06:38 AM

3. Oh, it's okay. If they can't pay all their claims, they can just file for bankruptcy.

Then they can escape from all their contractual obligations, all those claims, and their pension plans, while, of course, paying their executives millions in bonuses for dealing with the challenges of a bankruptcy. So you see? The executives who pushed for this new, riskier rule will come out unharmed. Nobody gets hurt . . . except people who don't matter.

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 06:51 AM

4. This is particularly egregious

due to the fact that investment returns are at historic lows, which is why all prop & casualty ins cos are raising their rates.

I'd be very wary of this one.

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 06:59 AM

5. I see a crash in the near future.

Don't expect your life insurance policies to pay out in the future.

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 07:40 AM

6. We really are in decay, aren't we?

There is a whole 'nother shadow world out there that the insurance companies are now filtering their money to. We see it as a poor investment, but I'm sure when the time comes to do the post mortem people will see a pattern, and recognize that what is going on is a redistribution of wealth. Trickling Up.

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 08:51 AM

7. Insurance companies' hard money traded for (CDS,CDO,CDM) soft money.

Thus propping the soft money market before its eventual collapse.

That collapse will happen as Americans attempt to take out their retirements' bottom-of-the-barrel funds. Now put off a little longer.

By then, we'll have no resources, no industry and no democracy.

And, no way of getting it back.

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Response to HiPointDem (Original post)

Wed Dec 5, 2012, 08:53 AM

8. So what's the problem? The taxpayers are there to pick up any tabs.

Geesh. For a minute, I was worried that they were going to socialize the rewards part.

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