Insurace co CD: fixed immediate annuity?

[brewer12345]

Here is a partial list. As you can see, there are plenty of names. https://www.nolhga.com/factsandfigures/main.cfm/location/insolvencies

The guaranty fund system isn't capable of dealing with the insolvency of a large company.

 

[pb4uski]

Here is a partial list. As you can see, there are plenty of names. https://www.nolhga.com/factsandfigures/main.cfm/location/insolvencies

The guaranty fund system isn't capable of dealing with the insolvency of a large company.

WADR brewer that's a horsesh!t list.... click on the more recent insolvencies it is mostly non-life insurers.... weed out the small fish (less that $1 billion in assets) and there is nothing to talk about since MBL.

While I agree that the guaranty fund system isn't capable of dealing with the insolvency of a large company, there haven't been any large company insolvencies since RBC was put in place.... and some would argue that even Executive Life and MBL were not particularly large. MBL only had $13.8 billion in assets.... not large by any stretch.

Most recent insolvencies from the list you provided:

• 2019 - Northwestern National Insurance Company (NNIC) is a P&C company that wrote non-cancellable comprehensive health insurance in the 1960’s and 1970’s.
  
• 2019 - Senior American Insurance Company (SAIC) and AF&L are affiliated P&C companies domiciled in Pennsylvania.
  
• 2018 - North Carolina Mutual Life Insurance Company (NC Mutual), based in Durham, North Carolina, was founded in 1898 and offered life insurance, accident and health products to individuals and groups, as well as annuity products. .. The NC Department of Insurance indicates in its FAQs that the most significant issue currently impacting NC Mutual is a reinsurance transaction in which the assets securing the transaction were misappropriated by the investment manager. NC Mutual is attempting to recover these assets through all means available, including litigation.
  
  
  Valid... but very small - The company has total assets of $162 million... peanuts
  ​
• 2017 - Penn Treaty and American Network provided long-term-care insurance to over 126,000 policyholders in all 50 states and the District of Columbia.
  
• 2016 - American Medical and Life Insurance Company (AMLICO) was a New York domiciled company licensed in 41 states. AMLICO wrote both individual (limited benefit medical, ordinary life and short term disability) and group business (dental, life, accident and sickness and vision).
  
• 2015 - CoOportunity Health (doesn't sound like annuities)
  
• 2015 - SeeChange Health Insurance Company (SHIC) was a California domestic insurer who primarily wrote group health and dental policies (both ACA and non-ACA policies).
  
• 2013 - Lumbermens Mutual Casualty Company is primarily engaged in property and casualty insurance, with health insurance representing a very small proportion of their total business.

 

[brewer12345]

WADR brewer that's a horsesh!t list.... click on the more recent insolvencies it is mostly non-life insurers.... weed out the small fish (less that $1 billion in assets) and there is nothing to talk about since MBL.

Hey, I just posted a link to the data. Conclusions are left as an exercise for the reader.

FWIW, I have very little tolerance for counterparty risk from insurance products I buy.

 

[pb4uski]

That's bull... you knew the list was misleading before you even posted it.

People here respect your views and knowledge.... at least try to be honest.

 

[Bruno]

That's bull... you knew the list was misleading before you even posted it.

People here respect your views and knowledge.... at least try to be honest.

Thank You!!

 

[brewer12345]

That's bull... you knew the list was misleading before you even posted it.

People here respect your views and knowledge.... at least try to be honest.

Not sure why a presentation of facts draws so much ire. All I did was share a link.

 

[pb4uski]

Not sure why a presentation of facts draws so much ire. All I did was share a link.

It is because the subject was credit risk of buying an annuity and the link that you shared listed insolvencies where many of the companies, especially the more recent insolvencies, were not annuity writers at all.

If it was any other poster I would have thought they just didn't know any better.... given your experience, you should know better and my belief was that you intentionally tried to mislead readers of the thread... insinuating that thereare numerous insolvencies of annuity providers when the facts are that they are few and far between.

 

[brewer12345]

My point was that insurers of all stripes cans and do go bust so it would be wise to be careful. Nothing more, nothing less. I don't care for the insinuations from someone who should know better.

 

[pb4uski]

My point was that insurers of all stripes cans and do go bust ...

Yup.... and martians may land in my parking lot.... anything is possible.

At the end of the day, unless one exceeds the guaranty fund association limits the credit risk of owning an annuity is negligible.... more than an FDIC or NCUA insured CD but less than an high grade corporate bond IMO.... and on that we can agree to disagree.

For the record, many more banks went bust than insurers back in the Great Recession.... in fact, no signifcant insurer that I can recall.

 

[brewer12345]

Yup.... and martians may land in my parking lot.... anything is possible.

At the end of the day, unless one exceeds the guaranty fund association limits the credit risk of owning an annuity is negligible.... more than an FDIC or NCUA insured CD but less than an high grade corporate bond IMO.... and on that we can agree to disagree.

For the record, many more banks went bust than insurers back in the Great Recession.... in fact, no signifcant insurer that I can recall.

I can think of at least one where the holdco blew up in the crash. I seem to recall Conseco was pretty special.

More to the point, when I buy a guarantee from an insurer I don't want to spend any time wondering if they will live up to it. If you prefer to live dangerously, be my guest.

 

[pb4uski]

But no annuity defaults... which is what the whole point was. If there were some annuity investors who lost money during the financial crisis, please point them out.

But there were lots of failed banks... thank god for the FDIC bailing out the banks depositors.

I concede that there were some insurers who were strained during that difficult time.... but none of them broke, which in case you aren't paying attention is the whole point.

Your quip about living dangerously is stupid.... you really think having a SPDA under the state guaranty limit with a reasonably quality insurer is dangerous?

 

[brewer12345]

Your quip about living dangerously is stupid.... you really think having a SPDA under the state guaranty limit with a reasonably quality insurer is dangerous?

Again, I don't appreciate your disrespectful tone.

You and I have different risk tolerances when it comes to insurer counterparty risk. Mine is apparently lower than yours. Shall I imply you are stupid? Perhaps not.

I have no appetite for risky insurers because I view the state guaranty system as completely inadequate in the event of a large insurer insolvency. YMMV. Have a nice life.

 

[pb4uski]

To be clear, I did not say or imply that you were stupid... quite the opposite in my experience.... I only said that to characterize buying an annuity as "living dangerously" was stupid.

I am curious as to what fixed income investments are not "living dangerously" other than full faith and credit issues.

Also curious as to whether in your view whether all insurers are "risky"? What about NML, NYL, Guardian and MassMu? Are they "risky"?

 

[MichaelB]

We could do without some of the personal and demeaning rhetoric. It is possible to disagree and be respectful.