powell (ed.) - u.s. insurance industries after the 2007-2009 financial crisis (2013)

[...]... arose during the 200 7-2 009 financial crisis, when one of the largest holding companies, AIG, suffered severe losses that threatened to affect its insurance subsidiaries GAO was asked to examine any effects of the financial crisis on the insurance industry This report addresses (1) what is known about how the financial crisis of 200 7-2 009 affected the insurance industry and policyholders, (2) the factors... Powell ISBN: 97 8-1 -6 294 8-1 1 8-0 © 2013 Nova Science Publishers, Inc Chapter 1 INSURANCE MARKETS: IMPACTS OF AND REGULATORY RESPONSE TO THE 200 7-2 009 FINANCIAL CRISIS* United States Government Accountability Office WHY GAO DID THIS STUDY Insurance plays an important role in ensuring the smooth functioning of the economy Concerns about the oversight of the $1 trillion life and property/casualty insurance industry... concerns about Insurance Markets 5 their financial position and regulators’ response to and preparation for future financial crises that might affect insurers and their policyholders The report responds to your request to examine any effects of the financial crisis on the insurance industry and policyholders The report addresses (1) what is known about how the financial crisis affected insurance industry... guaranty insurance, and mortgage guaranty insurance, are not covered by state guaranty funds EFFECTS OF THE CRISIS WERE LIMITED LARGELY TO CERTAIN PRODUCTS AND LINES OF INSURANCE The financial crisis generally had a limited effect on the insurance industry and policyholders, with the exception of certain annuity products in the life insurance industry and the financial and mortgage guaranty lines of insurance. .. reports on the financial crisis To address how the financial crisis affected the insurance industry and policyholders, we consulted academic papers, government reports, industry representatives, and regulatory officials to identify the key characteristics associated with the financial crisis We obtained and analyzed financial data from a variety of data sources including SNL Financial, a private financial. .. modify them to fit their needs The Federal Insurance Office (FIO) was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) Although FIO is not a regulator or supervisor, it monitors certain aspects of the insurance industry, including identifying issues or gaps in the regulation of insurers that could contribute to a systemic crisis in the insurance industry or the. .. the economy Concerns about the oversight of the insurance industry arose during the 200 7-2 009 financial crisis, when one of the largest U.S holding companies that had substantial insurance operations, American International Group, Inc (AIG), suffered large losses These losses were driven in large part by activities conducted by a non -insurance affiliate, AIG Financial Products, but also included securities... percent) in the life industry, while private passenger auto liability insurance was the largest portion of business (20 percent) in the P/C industry.5 In the P/C industry, financial and mortgage guaranty insurance represented less than 2 percent of premiums written on average during the period.6 These lines differ from the other P/C lines we reviewed because they facilitate liquidity in the capital... dropped during the crisis, variable annuities with guarantees purchased before the crisis were “in the money,” meaning that the policyholders’ account values were significantly less than the promised benefits on their accounts, so the policyholders were being credited with the guaranteed minimum instead of the lower rates actually being earned Thus, policyholders were more likely to stay in their variable... activity undertaken by some of its life insurance companies which created liquidity issues for some insurers The losses threatened to bankrupt the company, and AIG was one of the largest recipients of assistance by the Federal Reserve Bank of New York and the federal government under the Troubled Asset Relief Program (TARP) set up during the crisis. 1 Some other insurance companies also took advantage . financial crisis on the insurance industry. This report addresses ( 1) what is known about how the financial crisis of 200 7-2 009 affected the insurance industry and policyholders, ( 2) the factors Johnson. Concerns about the oversight of the insurance industry arose during the 200 7-2 009 financial crisis, when one of the largest U. S. holding companies that had substantial insurance operations, American. addresses ( 1) what is known about how the financial crisis of 200 7-2 009 affected the insurance industry and policyholders, ( 2) the factors that affected the impact of the crisis on insurers and