It’s rather silly to think that – or to write an article as if – P&C insurers, or AIA members, for that matter, have any kind of unanimity on this matter.
The companies that played fast and loose with their investment portfolios, primarily those that sold lots of Variable Annuity products, are VERY interested in getting a bailout.
Just browse down the list of scrubs that have taken large writedowns on structured finance investments. Many of those players have already tapped the capital markets …
ANY organization that fails to compete in the marketplace deserves no “bailout” consideration. When a company fails, it means the Board of Directors and the executive management team failed. We’re not talking about one or two bad quarters; we’re talking about a flawed business model, poor decision making, poor oversight, and a history of unprofitability. Why would anyone want to reward incompetence? It’s a slap in the face to every business that does things right. Kudos to the companies who refuse any “charity” and know how to effectively manage themselves.
If you take the money, the govnmt can and will crawl up your backside. Tell your CEO’s what pay they can take and what they have to put back, what trips you can go on, what comferences you can have and how much you can spend on them. What self serving CEO and board of directors would want that?
WOW…respectively, if only things were as “black and white” as David and ER must feel they are. I am VP for a company (not insurance…) that has struggled but is making it through employees and all (based on solids decisions etc) however…one would have to worry about where our economy would have gone had we let the mistakes (we all make them) of a few negatively impact the entire county even more so than it already has.
I trust that the bailout will positively impact many many Americans that would have otherwise suffered greatly based on these bad decisions.
I have empathy for those companies that are hurting through no fault of their own. But it is a fact of life that sometimes bad things happen to good people. Sad, concerning and disconcerting, but certainly not worth turning our country into a socialistic concern. What scares me more than the cost of this bailout is the future. Once government sinks their paws into corporate America ownership, once Barak “spread-the-wealth” Obama takes office and IF the Senate gives the Democrats their 60 seat super-majority, think ahead to how much more government expansion there will be.
The thought of where our country is conceivably headed makes me sick to my stomach. Think past your immediate cash flow issues. Look to the big picture.
Christine hit the nail on the head. The offercers of these corps. are not going to take bailout money because if they did they would not be able to pay themselve 100s of millions like the Travelers and other CEOs do.
Fortunately I do not have cash flow issues, I have a ridiculously high credit score, I can pay my mortgage, save, im a “gen x’er” to boot and I am NOT voting the “spread the wealth” ticket for sure. However it does seem that at times a blanket approach to help is needed…to many retirements accounts etc would be lost without it.
That is a far cry from a Socialistic society…this entire situation may infact help to regulate some of the areas that for so long were not regulated well AND will wake people up to the fact that one must earn things….the “deserve” or “it’s my right” will not work.
Agents and a majority of the insurance industry have long stated that State regulation is more responsive and reliable than Federal regulation. The proof is in the fact that insurers remain liquid and financially solid – No thanks to the Fed. Investment and reserving requirements imposed on Companies by State regulation are far more stringent and effective than what our Federal regulators can ever hope to muster. Beware of Treasury’s attempt to “bait” companies into accepting un-needed and un-wanted Bail-out dollars! Once “hooked”, Treasury will “nationalize” the insurance industry and raid insurers’ solid, low-risk assets (the types of “boring” but safe investments required by STATE regulation to protect consumers) to supplement the JUNK mortgage industry assets they have purchased with OUR tax money. Once accomplished, insurance consumers will be thrown into the same Government-made morass as hapless innocent borrowers – begging the Fed for a handout..
Hate to point out the obvious, but many P&C insurers ALSO write life insurance, incl. VA. Some of these “P&C insurers” will be losing $7-8 a share this quarter from investment writedowns attributable to their Life divisions (think “HIG”).
We all know that P&C insurers will be adversely impacted….in varying degrees, but impacted nonetheless. However, this should not result in any kind of bailout or money from the federal government.
Poor business results stemming from such things as ill-advised business decisions, bad investments, interest rates, economic downturns and/or unethical behavior are simply a reality when individuals decide to put capital at risk in a business venture. An undesirable outcome of said decision should NEVER result in “assistance” from or meddling by the federal government other than enforcing laws and regulations.
There was a time when the mere thought of this level of involvement by the federal government in our capitalistic economy would horrify even the most casual follower of such events. How did we get to a point at which we even consider or debate the potential benefits? It is no wonder we are about to elect a socialist to the highest office in the land.
I don’t think there is any question regarding McCain’s position on the political scale. He is a moderate that has a penchant for infuriating conservatives in the Republican Party. Even though he has been a maverick and has been outspoken on government spending, he has been part of the problem as a member of the federal government for decades. Very simply, he has been far too cozy with the left over the years. Let’s not get nutty, though, and make a rididulous claim that he is a socialist. Obama is a socialist and, in spite of McCains shortcomings, McCain is far better than Obama in many ways.
Some companies that write P&C may own companies that write Life, or they may be part of the same holding company, yes. But no P&C companies also write life, as you seem to know. Sorry your wording was poor.
A few companies at least acting like they’ve got some integrity. Stop the bail out now!
It’s rather silly to think that – or to write an article as if – P&C insurers, or AIA members, for that matter, have any kind of unanimity on this matter.
The companies that played fast and loose with their investment portfolios, primarily those that sold lots of Variable Annuity products, are VERY interested in getting a bailout.
Just browse down the list of scrubs that have taken large writedowns on structured finance investments. Many of those players have already tapped the capital markets …
Hate to point out the obvious. But P&C insurers don’t write Variable Annuity products. And life insurers are hoping to be included in the bailout.
ANY organization that fails to compete in the marketplace deserves no “bailout” consideration. When a company fails, it means the Board of Directors and the executive management team failed. We’re not talking about one or two bad quarters; we’re talking about a flawed business model, poor decision making, poor oversight, and a history of unprofitability. Why would anyone want to reward incompetence? It’s a slap in the face to every business that does things right. Kudos to the companies who refuse any “charity” and know how to effectively manage themselves.
David, you rock. My thoughts exactly. Side note: I wish I could own a business, spend lavishly, and then have someone bail me out when it fails!
If you take the money, the govnmt can and will crawl up your backside. Tell your CEO’s what pay they can take and what they have to put back, what trips you can go on, what comferences you can have and how much you can spend on them. What self serving CEO and board of directors would want that?
WOW…respectively, if only things were as “black and white” as David and ER must feel they are. I am VP for a company (not insurance…) that has struggled but is making it through employees and all (based on solids decisions etc) however…one would have to worry about where our economy would have gone had we let the mistakes (we all make them) of a few negatively impact the entire county even more so than it already has.
I trust that the bailout will positively impact many many Americans that would have otherwise suffered greatly based on these bad decisions.
I have empathy for those companies that are hurting through no fault of their own. But it is a fact of life that sometimes bad things happen to good people. Sad, concerning and disconcerting, but certainly not worth turning our country into a socialistic concern. What scares me more than the cost of this bailout is the future. Once government sinks their paws into corporate America ownership, once Barak “spread-the-wealth” Obama takes office and IF the Senate gives the Democrats their 60 seat super-majority, think ahead to how much more government expansion there will be.
The thought of where our country is conceivably headed makes me sick to my stomach. Think past your immediate cash flow issues. Look to the big picture.
Christine hit the nail on the head. The offercers of these corps. are not going to take bailout money because if they did they would not be able to pay themselve 100s of millions like the Travelers and other CEOs do.
Fortunately I do not have cash flow issues, I have a ridiculously high credit score, I can pay my mortgage, save, im a “gen x’er” to boot and I am NOT voting the “spread the wealth” ticket for sure. However it does seem that at times a blanket approach to help is needed…to many retirements accounts etc would be lost without it.
That is a far cry from a Socialistic society…this entire situation may infact help to regulate some of the areas that for so long were not regulated well AND will wake people up to the fact that one must earn things….the “deserve” or “it’s my right” will not work.
Agents and a majority of the insurance industry have long stated that State regulation is more responsive and reliable than Federal regulation. The proof is in the fact that insurers remain liquid and financially solid – No thanks to the Fed. Investment and reserving requirements imposed on Companies by State regulation are far more stringent and effective than what our Federal regulators can ever hope to muster. Beware of Treasury’s attempt to “bait” companies into accepting un-needed and un-wanted Bail-out dollars! Once “hooked”, Treasury will “nationalize” the insurance industry and raid insurers’ solid, low-risk assets (the types of “boring” but safe investments required by STATE regulation to protect consumers) to supplement the JUNK mortgage industry assets they have purchased with OUR tax money. Once accomplished, insurance consumers will be thrown into the same Government-made morass as hapless innocent borrowers – begging the Fed for a handout..
Hate to point out the obvious, but many P&C insurers ALSO write life insurance, incl. VA. Some of these “P&C insurers” will be losing $7-8 a share this quarter from investment writedowns attributable to their Life divisions (think “HIG”).
We all know that P&C insurers will be adversely impacted….in varying degrees, but impacted nonetheless. However, this should not result in any kind of bailout or money from the federal government.
Poor business results stemming from such things as ill-advised business decisions, bad investments, interest rates, economic downturns and/or unethical behavior are simply a reality when individuals decide to put capital at risk in a business venture. An undesirable outcome of said decision should NEVER result in “assistance” from or meddling by the federal government other than enforcing laws and regulations.
There was a time when the mere thought of this level of involvement by the federal government in our capitalistic economy would horrify even the most casual follower of such events. How did we get to a point at which we even consider or debate the potential benefits? It is no wonder we are about to elect a socialist to the highest office in the land.
Yes. Even if McCain were to somehow pull out a win, the U.S. will have elected a socialist president. Just like it has been doing for decades.
:-)
I don’t think there is any question regarding McCain’s position on the political scale. He is a moderate that has a penchant for infuriating conservatives in the Republican Party. Even though he has been a maverick and has been outspoken on government spending, he has been part of the problem as a member of the federal government for decades. Very simply, he has been far too cozy with the left over the years. Let’s not get nutty, though, and make a rididulous claim that he is a socialist. Obama is a socialist and, in spite of McCains shortcomings, McCain is far better than Obama in many ways.
Quick quiz for you. Use the flowchart.
http://www.meltingpotproject.com/.a/6a00e5501bb44a8833010535c356bc970b-pi
You’ll have to copy and paste the url – sorry that the Insurance Journal isn’t up to “Web 2.0” standards LOL
what up
Not to mention what are probably very unappealing repayment terms…
Some companies that write P&C may own companies that write Life, or they may be part of the same holding company, yes. But no P&C companies also write life, as you seem to know. Sorry your wording was poor.