What is the problem with higher surplus requirements? Seems to be within the scope of the governments obligation to make sure the industry is able to meet its obligations to our society. To me it smell’s like lobbyists walking the halls in Washington.
The Federal Government should not be in the business of usurping the States who have been successfully regulating the US insurance industry for hundreds of years. The State Insurance Commissioners understand full well what reserve and surplus requirements insurers should comply with. The Feds continue to bath in their ignorance from equating banking with insurance.
No matter what the capital requirements are they will be inadequate if we have another collapse since the next would be much larger from many more years of stimulus and low interest rates. In a properly functioning market capital requirements are assessed every day by all parties involved and leverage such as what we see today or a few years ago would be unheard of. These are the problems that manifest in a centrally planned economy where inflation is used to keep the more and more deformed economy running, eventually the severe imbalances can not be papered over and things get out of hand. It’s sad to see some many obivious to this after having just gone through a mini version.
As the former Chairman/CEO of two different insurers I should be against this but I am not if it is done correctly. Why? Because if we have a big collapse then the Feds will punish the industry with more regulation than just capital requirements. so I think the NAIC in concert with the rating agencies and the Feds should come to an agreement with minimum capital requirements. They could use BCAR or some other standard as a way to come up with the minimum and agree to adjustments based on the business portfolio. When the state of domicile conducts an audit they can report the capital to the Feds and keep them out of the state.
The Feds really want a whole lot more oversight than they have now. This might be a way to head them off at the past and keep them from blaming the states if there is a problem with an insurance company? Besides that, you have to admit, some states do a far better job than others when it comes to insurance company regulation for insurers domiciled in that state.
What is the problem with higher surplus requirements? Seems to be within the scope of the governments obligation to make sure the industry is able to meet its obligations to our society. To me it smell’s like lobbyists walking the halls in Washington.
The Federal Government should not be in the business of usurping the States who have been successfully regulating the US insurance industry for hundreds of years. The State Insurance Commissioners understand full well what reserve and surplus requirements insurers should comply with. The Feds continue to bath in their ignorance from equating banking with insurance.
No matter what the capital requirements are they will be inadequate if we have another collapse since the next would be much larger from many more years of stimulus and low interest rates. In a properly functioning market capital requirements are assessed every day by all parties involved and leverage such as what we see today or a few years ago would be unheard of. These are the problems that manifest in a centrally planned economy where inflation is used to keep the more and more deformed economy running, eventually the severe imbalances can not be papered over and things get out of hand. It’s sad to see some many obivious to this after having just gone through a mini version.
As the former Chairman/CEO of two different insurers I should be against this but I am not if it is done correctly. Why? Because if we have a big collapse then the Feds will punish the industry with more regulation than just capital requirements. so I think the NAIC in concert with the rating agencies and the Feds should come to an agreement with minimum capital requirements. They could use BCAR or some other standard as a way to come up with the minimum and agree to adjustments based on the business portfolio. When the state of domicile conducts an audit they can report the capital to the Feds and keep them out of the state.
The Feds really want a whole lot more oversight than they have now. This might be a way to head them off at the past and keep them from blaming the states if there is a problem with an insurance company? Besides that, you have to admit, some states do a far better job than others when it comes to insurance company regulation for insurers domiciled in that state.
“Head them off at the pass”- ha!