Clark Howard and A++ Companies Only?

[somarco]

The state guaranty fund is a last resort, rarely used. When a carrier is in receivership, the DOI directs operations while finding a carrier to buy their block. Existing claims are paid from cash flow & reserves.

In rare cases, with exceptionally small carriers, there are no assets and cash flow is insufficient. That is when the guaranty fund comes into play if they cannot find a suitor quickly enough.

Correction #2 . . . he OWNED a travel agency. Sold it a few years ago before airlines cut the fee's paid to agents.

Dave Ramsey, another topic on this forum, is not licensed to give investment advice so he is not held accountable for his advice either.

Clark, Dave, your barber . . . anyone who is not licensed with the DOI, SEC, etc. can give advice with impunity.

Nice, huh?

I usually pick up a dozen or so clients per year because of Clark, so I don't say a lot about his views on insurance, no matter how misinformed it may be.

 

[insuranceexec]

In Arkansas you are forbid from mentioning the Insurance Guaranty Association when selling any type of insurance policy.

In Arkansas the Consumer is protected up to 300K; providing the company participates in the association, which in my experience I have found that most do.

 

[Mark]

Also some policies do not participate and are not protected by it. Groups like Knights of Columbas, Woodmen of the World and Royal Neighbors do not have such protection at all.

There is a good reason for this. There are insurance policies and there is certificates of insurance.

One the ins dept, regulates and one they do not.

I would never sell a certifcate of insurance policy.

 

[HomeService]

Our insurance department frequently tells us that we are not to bring up the fact that the ins dept backs companies { Like FDIC backs banks} because we are in effect binding the insurance department as if they were an insuring company.

 

[Mark]

Our insurance department frequently tells us that we are not to bring up the fact that the ins dept backs companies { Like FDIC backs banks} because we are in effect binding the insurance department as if they were an insuring company.

I agree with you. They don't want the Ins Companies passing the buck to them or to have to take over the company.

nolhga.com :: Law Summaries <--- here is the link, that explains each states limits and more details about the reserve.

I went back and delete some of my post on the matter, because I don't want the general public to see it, and this info is just meant for insurance agents. But that link will tell you everything that you need to know.

 

[KConway]

nolhga.com :: Law Summaries <--- here is the link, that explains each states limits and more details about the reserve.

Thanks for the link Mark.

 

[Drewrilla]

AIG was A++ with a 98 on their Comdex (out of 100)
AIG is now A with an 84 on their Comdex

NML is A++, John Hancock is A++, and I believe NYL as well. Two are mutual companies (by nature more conservative and tons $$$ coming in via WL contracts) and Hancock used to be a Mutual Company. Coincidence...possibly

No one is going insolvent unless this recession lasts another 2 years. Worst more likely case scenario for AIG (the life insurance portion anyway) - they are eventually sold. If anyone remembers what happened to CNA, it will be the same thing. Still on the books, still convertable, still guaranteed, just a pain to work with. I'm sure their permanent policies that were sold on a current assumption basis will need additional funding though. Term will be just fine.

 

[Phillip Arnn]

As a new agent, it is stuff like this that makes me nervous. That is the stuff I don't know. I thought the Guarantee Association was a great plus to the industry and we could assure our prospects and clients that even AIG policies were safe because of the Guarantee Assoc. My permanent life policy was originally with a FL carrier that went belly up and was asumed by another insurer through the GA. Why would the carriers want to hide that industry safeguard?
Thank you all for your posts.

 

[Drewrilla]

Phillip, the insurance industry does not want to hide the information. OCI merely wants to ensure that it isn't a reason to purchase the insurance. It keeps agents from saying things like "Even if the insurance company goes insolvent, the State guarantees your life insurance death benefit regardless of carrier stability."

It is basically an Advertising Prohibition Policy that states "No insurer or insurance intermediary may make use in any manner of the protection given to policyholders by Chapter 646 (guarantee association statute) as a reason (key word there) for buying insurance from the insurer or intermediary."

Each State has their own specific guidelines, but this is usually the general rule.

Section 628.34 for Wisconsin, each State I believe would be a slight variation.

I hope this helps.

 

[Phillip Arnn]

Gotch ya. After reading the TX regs in light of your explanation I see the reasoningis.