This is largely a consequence of FED (read Administration) policy to try to stimulate the economy through artificially low (like zero) interest rates. But this is small potatoes compared to the many seniors who saved responsibly all their lives but now can't live on the (near zero) revenue from that investment. When you are old and close to liquidating your investment you don't want to be invested in a volatile market. At the same time, younger folks and nearly all commercial investors have their money in the market (vs bonds, etc.) which has driving the market artificially high. It will be interesting to see if a soft landing can be achieved or of the "head-in-the sand" approach will continue, making the inevitable correction worse. Scott
> -----Original Message----- > From: Mitch Haley via Mercedes > Sent: Sunday, August 14, 2016 8:31 AM > > > http://www.nytimes.com/2016/08/14/business/why-some-life-insurance- > premiums-are-skyrocketing.html > > The NY Times describes the latest scam by insurance companies to drain > policies of built up cash values and then raising rates on all such policies > claiming there are insufficient funds to pay benefits. > The strategy seems to have been pioneered by European Insurance > companies that have gained control of US insurance companies: > > 1. Convince state regulators that the policies are overfunded. They do this by > moving liabilities for future payouts to off-balance-sheet companies that are > not subject to state regulation. > 2. For some reason state regulators sign off on this and authorize excess > funds to be paid out to insurance company shareholders (the European > parent company) as an extra-ordinary dividends, in some cases over $2 > billion. > 3. Some time later convince state regulators that the policies are now > underfunded because the off-balance-sheet companies defaulted and that > policy premiums need to be raised by 200-300%. > 4. State regulators approve the 200-300% premium increases. > 5. Policyholders file class-action lawsuits but have trouble prevailing since > state regulators signed off at each stage that the actions of the insurance > company were fiscally sound and hence any subsequent premium increase > could not have been anticipated. > > Note that this scam can only happen with life insurance and LTC policies that > build up future benefits using some kind of cash accumulation. Straight > insurance or term life insurance policyholders cannot be scammed in this way > since there is no cash accumulation going on. > > Discussion here: > https://www.fatwallet.com/forums/finance/1519842/19597487/ > > _______________________________________ _______________________________________ http://www.okiebenz.com To search list archives http://www.okiebenz.com/archive/ To Unsubscribe or change delivery options go to: http://mail.okiebenz.com/mailman/listinfo/mercedes_okiebenz.com
