• Summary: Floating rate funding agreements, which have put options or short maturities, became an important product for many insurers in the 1990s.
  • They are usually issued to short-term funds such as money market, securities lending, and buffer funds.
  • The default by General American Life Insurance on $6 billion in funding agreements in 1999 led to a retrenchment in this market.
  • Buyers became concerned about credit risk, and sellers came under increased rating agency and regulator scrutiny.

2001 - SOA - Floating Rate Funding Agreements, Society of Actuaries - 23p