The "Wizard of Oz" Solution to Insurance Company Solvency
Life Insurers' Request for Relief Challenged
By David S. Hilzenrath Washington Post Staff Writer Tuesday, January 27, 2009; D02
A life insurance industry request for regulatory relief would place consumers "at undue risk," Virginia's insurance commissioner said.
Weakened by the financial crisis, life insurers have been seeking freedom to operate with thinner financial cushions, and state regulators from across the country are convening in Washington today to hear testimony on the proposals.
Virginia Insurance Commissioner Alfred W. Gross weighed in with a letter to fellow officials Friday, saying one of the key proposals could make it harder for regulators to step in as needed "when dealing with truly troubled companies."
Gross's was one of several statements challenging the proposals.
"Lowering solvency standards on an emergency basis during a time of financial crisis is contrary to their very purpose," Louisiana Insurance Commissioner James J. Donelon said in a letter dated Friday. …