One has to question whether the sales of the bonds are in compliance with regulations and if so, if the purchasers of teh bonds are aware of the inherent business risks.
You suppose, huh, that financial analysts at A.M. Best, Malone at FBR (who has been an WSJ All-Star analyst in insurance and specifically referred to the regulatory filings), the analysts at BEST, the state regulatory agencies, the 3000 some agents, and the institutional investors, are all overlooking one of the most basic facts about the insurance company? And also suppose they would be particularly inclined to overlook compliance with regulations knowing that the company invests in VC? And since the company is performing so poorly, the company itself has an incentive to throw it all down the drain, right?
Do you have any fact at all why this should be a concern that we should look into? Armin is right, I'm not sure why your concern should be given any weight at all in an analysis and am not really sure you thought about this before you posted it.
Incidentally, BEST, in fact, referenced the A.M. Best rating in one of their reports in which they stated an upgrade from B++ to A- level is foreseeable – mentioning the "virtuous circle." (From the BEST report dated 2/8/00.) I recently inquired about this and posted all that I know about this matter on the thread. That is, that the company will not sell equities and invest in bonds "just" to raise the rating; they are right now more focused on the bottom line. However, if there is a review by A.M. Best after FY2000, IMO, it is not unreasonable to assume there very well could be a rating change as a result.
Best regards. |
