A.M. Best Releases New Insolvency Study
The A.M. Best Company recently released a new study, Best's Insolvency Study, U.S. Life/Health Insurers, 1976-2002. The new study, which updates A.M. Best's 1992 insolvency study, examines more than 500 financially impaired U.S. life and health companies and shows that annual impairments have gone down in recent years, with impairments in 2002 matching the low total in 1976. The highest number of impairments occurred in 1991. Over the entire study period, the annual average of impairments was 1 in 109 companies.
According to a press release from A.M. Best, the causes of impairments were "multiple and interconnected." Inadequate pricing was the most common (22 percent), but it was closely linked with rapid growth (17 percent), the third-highest cause. Affiliate problems accounted for 20 percent of impairments, and these problems were associated with the fourth-highest cause, investment difficulties (14 percent). Alleged fraud accounted for 9 percent of impairments. A.M. Best notes in the press release that it believes some form of corporate mismanagement underlies all the causes of insolvency.
The new study can be purchased on the BestWeek Web site.
Staff Contact - Sean McKennaSerio to Leave N.Y. Insurance Department
On December 30, 2004, New York Governor George Pataki announced that Insurance Superintendent Gregory V. Serio will leave the department in January. Serio, who is leaving for a job in the private sector, has held the position of superintendent since May 2001. He joined the department in 1995 as first deputy superintendent and general counsel.
Governor Pataki has nominated State Assemblyman Howard D. Mills III to succeed Serio. Mills was a member of the Assembly's Insurance, Housing, and Ways and Means Committees. His nomination is subject to confirmation by the New York State Senate.
Staff Contact - Sean McKennaO'Sullivan Celebrates 10th Anniversary at NOLHGA
Bill O'Sullivan, NOLHGA's senior vice president and general counsel, celebrated his tenth year at NOLHGA this week. Please join the entire NOLHGA staff in congratulating him on this milestone and thanking him for his many years of service.
Staff Contact - Sean McKenna