How is Eliot Spitzer’s investigation into the financial services market likely to impact life insurers and reinsurers?
First, I salute Mr. Spitzer’s interest in protecting the public from unscrupulous systemic problems in our financial system. Reinsurance is an important and critical business for the financial stability of our economy. Yet it’s not well understood by most people, including financial professionals. So even though I believe there are no systemic problems in the life reinsurance business, the negative perceptions created by the ongoing press coverage contribute to the mysterious nature of the subject to most people. This is certainly something we will need to deal with, primarily through education of the financial press, regulators and the accounting profession. In light of recent news about possible improper reinsurance accounting by some P&C companies, can the life industry justify use of financial reinsurance? Yes. Life financial reinsurance is really more about motivation for the transaction than structure of the deal. There is little difference between a life financial reinsurance tr
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