โ Scribed by Edward J. Stone
No coin nor oath required. For personal study only.
he company supplying your insurance products may not be as sound as you think, warns a top government insurance administrator. Joanne Howard, administrator at the Federal Insurance Administration, is also a former insurance commissioner. And at a recent meeting of the Association of Banks-In-Insurance (Washington, D.C.), she explained why you may want to take another look at your insurance carriers.
T More than meets the eye "I recently attended an NAIC [National Association of Insurance Commissioners] conference that covered an interesting topic," said Howard. "One of the jobs I had after I left the commissioner of insurance spot was that I took over [monitoring of] insolvent property/casualty insurance companies. And all is not as it appears. One of the quotes that came out of one of yesterday's sessions on liquidation was that 'Figures don't lie, but liars all do figure! ' "And so," she continued, "looking at insurance companies from a regulatory perspective, there is more than meets the eye. There's a lot of information available from the domiciliary state-the state where the insurance company is domiciled-that certainly, lenders can get. And they should get it, because the Best Report [which rates insurance companies] shouldn't be the last word. I've taken over several insolvent companies that were rated 'A' until the last minute!" That's because some people take great pains to cover up any trouble that's brewing. "As an insurance regulator," revealed Howard, "I always look at one area which always bears scrutiny: What other intermediaries are handling money for the company? In taking over an insolvent company, we immediately freeze all the assets-and, in 30 days, cancel all the policies.
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