Recent financial news from the stock market, the world economy and government bailouts have just about everyone perplexed regarding what financial institutions are strong, which ones are in trouble and which ones will remain standing after the mergers and acquisitions are completed.
Banks are failing and/or merging, stocks are up or down depending on the hour and a line has formed at the Department of the Treasury with major institutions in several industries looking for a "bailout."
Like most of us, I'm concerned about where to keep my money, what's going to happen to my 401(k), or should I say, "What 401(k)?"
I also want to know if the money I pay my auto and homeowner insurer will be there should I have a claim in the near future. Will I be protected?
The reason for this concern started with the problems of a major international conglomerate that the news media referred to only as an insurance company. In fact, that company owns literally hundreds of diverse organizations worldwide, and insurance only is one part of the mix.
In fact, the one line of business that the company will retain, and remain strong in the future, is the insurance business, not the other diversified business lines.
All this is said to remind me that the insurance industry remains fundamentally strong.
The industry's assets are in the range of $500 billion above its legal obligation to policyholders.
That means insurers are financially able to continue selling policies, paying claims and developing new products to protect property, businesses and lives.
To protect their assets, the industry collectively maintains less than 20 percent of its portfolios in stocks, with more than two-thirds of their funds placed in highly rated corporate and government bonds.
Unlike many banks and other financial organizations, insurers are not suffering from either a credit or a liquidity crisis.
Further, and closest to each of us, insurers are regulated at the state level. In Georgia, it's the commissioner of insurance and fire safety whose department closely regulates life, health, property and casualty and other insurers.
"For the past 14 years, my No. 1 job has been to make sure that insurance companies are solvent and able to pay every valid claim. If it appears that any insurer will be unable to fulfill the promises made to Georgia policyholders, I will swiftly intervene with the goal of getting the insurer back into a strong solvency position," said Georgia Insurance Commissioner John Oxendine.
Policyholders are protected from a potential insurer failure through a limited safety net that is in place to pay claims. Initially funded by the insurance industry, the state guaranty fund is in place should a company not be able to pay its claims.
Control your home and auto insurance rates by comparing free online quotes now!
Banks are failing and/or merging, stocks are up or down depending on the hour and a line has formed at the Department of the Treasury with major institutions in several industries looking for a "bailout."
Like most of us, I'm concerned about where to keep my money, what's going to happen to my 401(k), or should I say, "What 401(k)?"
I also want to know if the money I pay my auto and homeowner insurer will be there should I have a claim in the near future. Will I be protected?
The reason for this concern started with the problems of a major international conglomerate that the news media referred to only as an insurance company. In fact, that company owns literally hundreds of diverse organizations worldwide, and insurance only is one part of the mix.
In fact, the one line of business that the company will retain, and remain strong in the future, is the insurance business, not the other diversified business lines.
All this is said to remind me that the insurance industry remains fundamentally strong.
The industry's assets are in the range of $500 billion above its legal obligation to policyholders.
That means insurers are financially able to continue selling policies, paying claims and developing new products to protect property, businesses and lives.
To protect their assets, the industry collectively maintains less than 20 percent of its portfolios in stocks, with more than two-thirds of their funds placed in highly rated corporate and government bonds.
Unlike many banks and other financial organizations, insurers are not suffering from either a credit or a liquidity crisis.
Further, and closest to each of us, insurers are regulated at the state level. In Georgia, it's the commissioner of insurance and fire safety whose department closely regulates life, health, property and casualty and other insurers.
"For the past 14 years, my No. 1 job has been to make sure that insurance companies are solvent and able to pay every valid claim. If it appears that any insurer will be unable to fulfill the promises made to Georgia policyholders, I will swiftly intervene with the goal of getting the insurer back into a strong solvency position," said Georgia Insurance Commissioner John Oxendine.
Policyholders are protected from a potential insurer failure through a limited safety net that is in place to pay claims. Initially funded by the insurance industry, the state guaranty fund is in place should a company not be able to pay its claims.
Control your home and auto insurance rates by comparing free online quotes now!
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