• National Financial of Waco was attracted to the $63.8 million block of policies that included the Eplands' because Texas regulations allowed the company to reduce the reserves needed to cover claims arising from those policies by $18 million, a stroke of accounting magic that created more than $15.5 million of additional capital.
• This new capital was used to pay for the purchase, but it left the company with a thinner cushion to pay claims from the policies it bought.
• The A. M. Best Company has given National Financial a C+ rating, which places it among the lower ranks of insurance companies.

1994 0328 - NYT - Transfers By Insurers Under Fire - [link]