American Equity would have to take back its $7 billion of annuity obli“Once done,” Gober wrote, American Equity “will have a substantially negative surplus, prompting a regulatory event.”
There is reason for concern and for investigation. But it is easy to overestimate the concern. The bare fact that NAIC rules do not consider something to be a valid asset does not mean that the thing in question has no value and will throw off no cash. The bare fact that at a given balance sheet date Hannover expects to make no payments on a contract does not mean that they do not have an obligation (and ability) to make payments on those contracts if and when the circumstances requiring payments emerge. It just means that, at the balance sheet date, management believes that the circumstances requiring them to make payments are sufficiently remote to obviate the need to make balance sheet provision for them. The words you uncover sound alarming. The actual situation may be less so. Careful and knowledgeable investigation is warranted.
American Equity would have to take back its $7 billion of annuity obli“Once done,” Gober wrote, American Equity “will have a substantially negative surplus, prompting a regulatory event.”
Paragraph near end has a cut-off sentence?
fixed.
Seems the textbook definition of fraud on an epic scale. 2008 redux.
There is reason for concern and for investigation. But it is easy to overestimate the concern. The bare fact that NAIC rules do not consider something to be a valid asset does not mean that the thing in question has no value and will throw off no cash. The bare fact that at a given balance sheet date Hannover expects to make no payments on a contract does not mean that they do not have an obligation (and ability) to make payments on those contracts if and when the circumstances requiring payments emerge. It just means that, at the balance sheet date, management believes that the circumstances requiring them to make payments are sufficiently remote to obviate the need to make balance sheet provision for them. The words you uncover sound alarming. The actual situation may be less so. Careful and knowledgeable investigation is warranted.