Litigation

AALU Supports Treasury Making Capital Available To Life Insurers Through Discount Window

By John Darer

David Stertzer, CEO of the Association for Advanced Life Underwriting ("AALU") stated the case in his CEO Update of October 30th, for why the United States Treasury should make capital available to life insurers as it has for banks (to facilitate lending):

"After discussions with key industry partners, we believe it is important for Treasury to give serious consideration to make capital available at the wholesale level through life insurers. Life insurance companies are one of the largest purchasers of corporate bonds; to date, life insurance companies hold approximately 18% of the U.S. corporate bonds. They also have substantial investment in equities, commercial mortgages, government bonds and other assets.

The wholesale devaluation of virtually all asset classes combined with a frozen capital market has prompted life insurers, like banks, to choose to conserve cash and invest in U.S. Treasuries rather than conduct their normal business activities. Additionally, the access to capital would also help ensure that Americans continue the ?flight to quality? we have seen to products that provide a safety net of guarantees and protection. No other private financial institution assumes the risks associated with premature death, outliving savings in retirement and paying expenses related to disability and long-term care. In these economic times, the role our industry plays is more important than ever".

Source: AALU  blog

The mission of AALU is to promote, preserve and protect advanced life insurance planning for the benefit of its members, their clients, the industry and the general public.

Full post as published by Structured Settlements 4Real on November 02, 2008 (boomark / email).