MAYBE IN SOME STATES?
This post updates a couple of previous posts here. The post of December 21, 2008, "They Bet Your Life Insurance Reserves. And You Lost?", contains a postscript added on January 12, 2009 reporting that the National Association of Insurance Commissioners scheduled a Hearing for the end of January, 2009 on "emergency" measures proposed by several Life Insurance Companies requesting an expedited process from the NAIC to adopt their proposals. The issue behind all of the proposed measures was whether to immediately loosen the Reserves requirements imposed by the States on Life Insurance Companies. The change would have allowed the Life Insurance Companies to operate immediately, and to report their impending results from 2008, with fewer Reserves than were previously required (and are still required, now). On February 2, 2009, a second post reported here that the National Association of Insurance Commissioners executive committee scotched this idea. In an NAIC Hearing held on Thursday, January 29, 2009 the linked proposals were all voted down in a "nearly unanimous vote" of the NAIC executive committee; only one (1) State Insurance Commissioner voted in favor of the Life Insurance Companies' proposals. The evidence to support this proposal either did not exist or was not presented by the Life Insurers, according to Commissioners. Now certain Life Insurance Companies are taking their case, if not evidence, to individual State Insurance Commissioners who they perceive may be more sympathetic to their request. See Andrew Frye and Erik Holm, "Insurers in Illinois, Iowa [and Kansas] Seek Relief From States (Update 3)" (Bloomberg.com, Friday, January 30, 2009). The risks, rewards and consequences to Policyholders, consumers, Life Insurance Companies and their lobbyists are explored in detail in this linked report well worth a look: David S. Hilzenrath and Nancy Trejos, "The Risks of Life Insurance/Anxiety About Industry Complicates Consumer Choices" (Washington Post.com, Sunday, February 1, 2009). Please Read The Disclaimer.
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