BUSINESS
By Barbara Demick and Barbara Demick,Knight-Ridder News Service Tim Mullaney of The Sun's Business staff contributed to this article | July 28, 1991
NEW YORK -- In the insurance industry, A. M. Best Co. has long been as close to the Bible as it gets. Since 1906, consumers have turned to the company's reports as the final word on the solvency of their insurers.But A. M. Best is facing an unprecedented challenge to its credibility as a result of the failure in April of Executive Life Insurance Co. of California, which had received Best's highest rating until January 1990.The rating agency's misjudgment has left policyholders stunned, angry and litigious.
BUSINESS
By Los Angeles Times | June 13, 1991
WASHINGTON -- In an action that could affect millions of workers nationwide, the Department of Labor sued two California companies yesterday for allegedly improperly replacing employee pension plans with annuities sold by Executive Life Insurance Co.The suits, which mark the first time the government has challenged employers' actions in picking insurance companies, seeks to force the companies to make up any losses the workers may suffer because of the...
BUSINESS
By Ross Hetrick and Ross Hetrick,Evening Sun Staff | October 8, 1991
Kenneth W. Hines figured he had built himself a fortress of financial security.Over the years, the salesman of gift shop merchandise had salted away $30,000 in commissions. He had been disappointed once by the stock market, and wanted a haven for the money.The "single premium life" policy with Fidelity Bankers Life Insurance Co., an insurance company in Richmond, Va., seemed to have everything. It would earn about 8 percent annually, tax free. He could borrow against it with no requirement to pay it back and it had a death benefit of $70,000.
BUSINESS
By Thomas Easton and Thomas Easton,New York Bureau of The Sun | July 23, 1991
NEW YORK -- Given that the role of insurance is to be around when all else fails, the problems facing these companies are causing concern among policyholders.Three major life insurers have collapsed in the past three months, and the ratings of six other major insurers were downgraded Friday by Moody's Investors Service, a rating agency.Standard & Poor's Corp. and Weiss Research, also rating agencies, say their operators have been deluged with thousands of telephone calls recently from distraught policyholders wondering if their policies are endangered.
BUSINESS
By New York Times | September 16, 1991
The nation's large life insurance companies have quietly begun exploring the establishment of a giant emergency fund that could provide short-term assistance to cash-strapped insurers.The fund, which would be financed by the companies themselves, would probably be modeled after the Federal Reserve's lending program for distressed banks.jTC As the Fed acts as a lender of last resort to banks whose cash is being depleted by depositor withdrawals, the insurance fund would be used to rescue insurers that are financially sound but unable to handle an onslaught of policyholders seeking refunds.
BUSINESS
By Eric N. Berg and Eric N. Berg,New York Times News Service HC | September 4, 1991
Nearly half the $200 billion Americans poured into 401(k) retirement savings plans in recent years is entrusted to life insurance companies. But corporate-benefit consultants and other financial experts say the troubles roiling that industry are making them increasingly anxious about the safety of some of these tax-deferred plans.More than $60 billion in 401(k) money invested with insurance companies will mature in the next two years. Though it is unlikely that all clients will demand their money at the same time, financial experts question the ability of some insurance companies to pay back the money invested with them.