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Insurers Say Fair Value Accounting Was a 'Powerful Accelerant' to Credit Crisis

National News • December 31, 2008
The application of fair value accounting measurements to an inactive, illiquid, and disorderly market for structured credit products helped fuel the worldwide credit crisis, an organization of ...

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Subject: You need assets to pay claims...

Posted On: December 31, 2008, 11:55 am CST
Posted By: Robert
Comment:
Insurance companies have assets to pay claims, not hold forever. In a way, the funds are similar to escrow funds held for a real estate transaction, only with a much longer and much more unpredictable payout pattern. Would you invest illiquid assets into an escrow fund?

If you want to invest in illiquid (or potentially illiquid) assets with the money set aside to pay claims, then you need to pay the price for lack of liquidity.

http://insurancenewsandviews.blogspot.com
Subject Posted By Posted On
RE: You need assets to pay claims... inscopywriter
Jan 2, 2009, 11:52 am
The application of fair value accounting measurements to an Agent
Dec 31, 2008, 12:46 pm
You need assets to pay claims... Robert
Dec 31, 2008, 11:55 am
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