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 
  • 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

re: Bond Lending / <Securities Lending>

  • There was also some discussion of the lack of liquidity associated with this program and it was felt that that is certainly consideration which must be taken into effect by companies contemplating such transactions.

1986-1, NAIC Proceedings - MINUTES WORKING GROUP ON EMERGING ISSUES CHICAGO ILLINOIS - NOVEMBER 1985 - (p211)

  • 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