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Politics : Ask Michael Burke -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (123480)	7/9/2010 9:45:15 AM
From: HPilot	Read Replies (1) \| Respond to of 132070

So what Obama is owned by BP.

To: Knighty Tin who wrote (123480)	7/9/2010 9:38:18 PM
From: Knighty Tin	Read Replies (1) \| Respond to of 132070

When people talk about financial problems, the life insurance cos. are rarely mentioned. (Property and Casualty cos. are mentioned all the time) There used to be a day way, way back in the mid 2000s when nearly all the large life cos. had the highest ratings from all four ratings cos. Today, there are a total of four cos with superior ratings across the board: New York Life, USAA, TIAA-CREF and Northwestern Mutual. USAA is only for the military and TIAA-CREF is only for teachers. That leaves two cos. for all the other people out there. Which means that the great majority of folks have either their life insurance or their annuities with cos. of lesser financial condition. For some reason, people don't seem concerned. "It's insured" is the mantra and nobody asks, "and who is insuring the insurer?" Just a few months ago I heard a man on tv say he had AIG annuities for his retirement, but, he wasn't worried, because they are annuities. Even a firm as big and savvy as Vanguard says their annuities are guaranteed by financially strong cos. I checked them out. Most of them are rated A-. Not horrible, but these products last you a lifetime and I don't want my entire nestegg or the security of my family (o.k., my string of courtesans) protected by A-. And certainly not A- with a negative outlook. To be fair, history has taught us to be unconcerned. When Baldwin-United went belly up, it was scooped up by a larger firm and nobody lost a nickle. That has always been the case. But, I contend that now is a different day. A weak firm can go under and New York Life can take it over with nary a problem. However, if 100 cos. go under, NYL and Northwestern have to protect their own ratings, and the other cos. may not be in a position to bail out anyone else. Am I in a panic? No. One of my elderly relatives has an immediate fixed annuity with John Hancock, who has a AA+ rating. For me, I wouldn't buy them today, but if I'd held them as long as my Uncle has (he has beaten their actuarial tables by a bunch), I wouldn't be worried. Still, the ramping down of the entire industry's credit ratings concerns me longer term.