Liquidity

  • In contrast, many of the investment-oriented products marketed in the last decade have shorter duration and require greater liquidity than was needed in earlier ...
1992 - World Bank - The Life Insurance Industry in the United States - Kenneth M Wright 
  • Brian Bayerle (American Council of Life Insurers—ACLI) said pledging collateral to the FHLB could actually increase a company’s liquidity, as the company can draw on liquid assets in the event of needing additional liquidity.
    • He said this is especially true if the more illiquid assets are pledged.
  • Mr. Ostlund said he is not convinced it is a good idea for an insurance company to be doing anything in that regard, as it might be desperation.
  • Michael Lovendusky (ACLI) said that could have been the situation in 2008.
  • Paul Graham (ACLI) said the asset the company gets as a result of the transaction is cash and what that does is take care of situations where a market may make it difficult to sell existing assets at book or better.
    • He said it allows companies to hold assets through a market cycle without taking a capital loss in the event that cash is needed to pay benefits.

2017 09 28 - NAIC - Market Conduct Annual Statement Blanks (D) Working Group - Conference Call

  • 1995 - LIQUIDITY: THE HIDDEN RISK FACTOR, Society of Actuaries - 20p

1. Heard report by ACLI concerning life insurance cash flow and liquidity problems caused by recent financial instability.  The report noted:

  • (a) High interest rates caused cash outflow.
  • (b) Forward investment commitments have been a source of cash drain while anticipated cash inflows have not
    materialized.
  • (c) Few companies have been forced to realize capital losses.
  • (d) Life insurance claims have been met.
  • (e) ACLI is developing mechanisms to deal with similar problems. (p88)

1980-2, NAIC Proceedings