American Banker (June 21)
“The Federal Deposit Insurance Corp. plans to hike deposit insurance assessment rates next year — a move that would increase costs for banks as they continue to see high deposit growth more than a year after the last round of pandemic stimulus.” On Tuesday, “the FDIC voted to issue a notice of proposed rulemaking that would raise deposit insurance assessment rates by 2 basis points for all insured depository institutions.”
Tags: Assessment rates, Banks, Costs, Deposit growth, Depository institutions, FDIC, Increase, Insurance, Pandemic, Rulemaking, Stimulus
Chicago Tribune (September 7)
“Homeowners located in areas that are expected to flood every 100 years are required to buy flood insurance…. But they pay rates far lower than the risks warrant. That gap deprives builders of incentives to stay out of low-lying areas that are vulnerable to flooding — or to elevate structures to keep them dry when the waters rise. It also promotes the destruction of wetlands that could reduce flooding. Oh, and it helps to tilt migration toward vulnerable coastal regions like those of Texas and Florida.”
Tags: Builders, Coastal regions, Destruction, Flood, Florida, Homeowners, Insurance, Rates, Texas, Vulnerable, Wetlands
Wall Street Journal (May 30)
“Critics are accusing President Trump’s 2018 budget of ‘gutting the safety net’ with cuts to food stamps and disability insurance. In reality, the White House is proposing long-needed reforms that would fix a dysfunctional disability system that traps Americans in dependency.”
Tags: Accusing, Budget, Critics, Cuts, Dependency, Disability, Dysfunctional, Food stamps, Insurance, Safety net, Trump, U.S.
Cover (March 16)
Disclosure of “how many claims are paid out is absolutely the right thing to do” in the insurance industry. “Paying claims is the only way our industry can prove its worth to its customers and advisers…. This is why publication is so important. Claims statistics give advisers the evidence to help them reassure clients who believe policies hardly ever pay out. Honesty and openness is the best policy.”
Tags: Advisers, Claims, Customers, Disclosure, Evidence, Honesty, Insurance, Openness, Statistics
Institutional Investor (May 23)
Autonomous driving (AD) will transform society and it could prove the best (or worst) of times for insurers. Nobody really knows. “Futurologists assert that the safety advances and insurance industry disruption caused by AD technology will be unlike any since the advent of automobiles in the late 19th century. According to KPMG, over the next 25 years, there will be an 80 percent decline in accident frequency.”
Tags: Accidents, Advances, Automobile, Autonomous driving, Cars, Disruption, Futurologists, Insurance, Insurers, KPMG, Safety, Society, Technology
Bloomberg (July 29)
We need to treat climate change like fire. “You insure your house against fire not because you are certain it will burn down but to guard against the risk that it might. Yes, climate change involves various costs known with reasonable confidence—but it also creates big risks. It’s only rational to insure against them.
Tags: Climate change, Confidence, Costs, Fire, Insurance, Rational, Risk
New York Times (February 5, 2014)
Recent estimates credit the Affordable Care Act with unchaining 2.5 million people from their jobs over the ensuing decade. “The new law will free people, young and old, to pursue careers or retirement without having to worry about health coverage. Workers can seek positions they are most qualified for and will no longer need to feel locked into a job they don’t like because they need insurance for themselves or their families.”
Tags: Affordable Care Act, Careers, Coverage, Families, Health, Insurance, Jobs, Positions, Qualified, Retirement, Workers
Chicago Tribune (July 19)
“The Chicago-based futures industry needs to better protect its clients.” Unlike banks (backed by the FDIC) or brokers (backed by the SIPC), the futures industry lacks a backstop to protect customer accounts. Last year MF Global went bankrupt, with customers losing up to $1.6 billion of their own supposedly safely segregated funds. More recently, Peregrine Financial Group went bankrupt. Customer funds are again missing. “There is no substitute for a well-capitalized insurance fund covering customer accounts…. The industry’s version of the FDIC and SIPC needs to be put in place soon — before the next firm goes belly up and takes its customers’ money with it.”
Boston Globe (April 23)
The Pension Benefit Guaranty Corporation (PBGC) receives small premiums from corporate pension plans. In return PBGC ensures that workers receive their benefits even if their employer goes bankrupt. Congress needs to raise these premiums to put “the corporation on more solid footing.” Doing so will protect the 44 million Americans covered by company pension plans “and spare taxpayers another costly bailout.”The Pension Benefit Guaranty Corporation (PBGC) receives small premiums from corporate pension plans. In return PBGC ensures that workers receive their benefits even if their employer goes bankrupt. Congress needs to raise these premiums to put “the corporation on more solid footing.” Doing so will protect the 44 million Americans covered by company pension plans “and spare taxpayers another costly bailout.”
