Indiana Insurance

In a small federal lobbying campaign noted that some of the largest and most successful life insurers have persuaded several states to adopt legislation that enables them to significantly increase their ability to improve the quality report. They are now invite other states to go along. But now critics say that companies are trying to withdraw their commitment to share the “Bounty” with 70 million policyholders, as a form of their owners.

The 10 states and the District of Columbia have approved laws that allow companies, known as mutual insurance, change their structure. The move allows the insurer to sell to investors for a long time, without obligation to pay a portion of insured accumulated gains on its behalf during decades of activity. Many largest insurers of the nation on reciprocity, as the giant Metropolitan Life, New York, John Hancock Life and belong to companies now lobbying lawmakers in their home countries to apply the changes.

In fact, are still in New York, and New York, Metropolitan Life, based in Massachusetts, where John Hancock, and in five other countries: Indiana, Louisiana, Ohio, Oregon and Texas . Four other countries have opted for another method is that it is also easier for mutual insurance companies, public funds. Neither yet Connecticut New Jersey - at some of the best known of the insurer - is currently considering legislation on the issue. But Newark-based Prudential Insurance, the greatest nation on mutual insurance, has expressed interest in the idea.

All this activity has alarmed critics say the changes to take effect the end of the brand character of mutual cooperation insurance. ”The companies are trying to place a steal money from policyholders,’’said J. Robert Hunter, a former insurance commissioner of Texas, is the director of insurance for the Consumer Federation of America in Washington. ”I do not know, as usual, he said.”

Insurance companies in the fact that the allegations of legislative change are disadvantaged compared to policyholders.

Whatever the merits of the arguments on both sides, it is clear that changes have great influence on the nation insurance sector. Only 100 of 1200 life insurance companies in the USA are on reciprocity, but the mutuals have more than one third of the 195 million different areas and control by the same share of $ industrie’s 346 billion in assets at Best Company, Agence rating.

How mutual insurance companies can not reserve for investors for money, and they are limited in their ability to borrow. In recent years, the mutual insurance say they have always paralyzed by these restrictions, which make it difficult to acquire other businesses and ensure that mutual relative to its competitors more effectively in the fierce fight between banks, investment funds, insurance and other financial institutions for the hundreds of billions of dollars that Americans save and invest every year.

In the past, as a mutual insurance company wanted about stock, its only option was a complete migration on the shares held. In these conversions, ending with assurance of its storage policy more to society, which represents a share of profits. So throw new species, actions have been delivered to the public.

But the new legislation on reciprocity can be used in a number of holding companies. This allows them to keep some aspects of the information system add, while the ability to issue shares and use of products for virtually everything from buying other companies to pay higher wages and bonus. Companies can also leaders of stock options, which do not exist in traditional societies on reciprocity.

Joseph A. Reali, Senior Vice President at Metropolitan New York Life, said that increasing the flexibility of each other, the new owners promise a framework for strengthening businesses and thus improve the security of the insurance sector in possession of policyholders.