Many U.S. banks have upped their insurance sales in Greece, Portugal, Ireland, Spain and Italy during the first half of 2011. The growth in sales is the result of the European financial crisis that threatens to plummet several nations into economic catastrophe. Banks have been selling insurance against credit losses in the nations more affected by the financial crisis, but the practice may be putting insurers at higher risk of costly payouts. As the crisis worsens, insurers are now looking for ways to mitigate the impact of defaults. According to…
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FDIC closes more banks – trend could lead to stricter legislations
The Federal Deposit Insurance Corporation (FDIC) announced the closing of three small banks this week, bringing this year’s total to 80 nationwide. Banks, both large and small, have been closing at a rapid pace, most unable to recover from the financial disaster wrought by the 2008 recession. In 2010, the agency shut down a total of 157 banks, costing billions of dollars in insured losses to the federal government. Officials say that the pace of bank closures has slowed for the time being, but that the economic pressure caused by…
Read MoreChanges to annuity regulation spur more transparency in the insurance industry
The National Association of Insurance Commissioners, a national standard-setting and regulatory support organization comprised of insurance regulators from across the country, have passed new amendments to the Annuity Disclosure Model Regulation. The regulation determined how insurers released information regarding annuity payments to consumers. Previously, such information was withheld as much as possible by insurers, but the new amendments require that this information be put into the limelight for all to see. Changes to the rule will also require insurers to detail the practices they use in determining annuities and how…
Read MoreAIG makes a $2.15 billion dent in its bailout repayments
American International Group Inc. (AIG) has made a payment of $2.15 billion to the U.S. Treasury Department as a partial repayment of the total $182 billion it was provided through the 2008 financial crisis bailout package. The repayment funds were drawn from the proceeds that the company made from the company’s sale of its Taiwan subsidiary called Nan Shan Life Insurance Company Shan to Ruen Chen Investment Holding Co. Nan Shan has been available for sale from AIG since the middle of 2009, when the government of Taiwan halted its…
Read MoreInstitute of International Finance warns European Union regarding upcoming changes to insurance and banking regulations
As the European Union seeks to draft new plans governing the investments made by insurance companies, the world’s largest financial institution has voice concern over the initiative. The Institute of International Finance claims that the new rules being weighed by the EU will encourage insurers to seek out riskier investments. Such practice would put the world’s financial infrastructure in a dangerous position, as the assets most often pursued by insurance companies looking to generate major profit are the ones whose failure is disastrous. The EU is looking to change regulations…
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