From a session at a meeting of the Society of Actuaries held in San Diego, CA, June 22-23, 2000
A discussion of liquidity management for life insurance companies marketing institutional clients, in particular with respect to GIC contracts and Funding agreements.
· What happened at General American with their defaults on funding agreements. Why did the regulators and rating agencies miss the problems?
· What was the impact of reinsurance?
· What is the effect of adding institutional business such as putable funding agreements on liquidity management?
· Are there prudent levels of this business that can be beneficial?
· What is the effect of funding agreements with downgrade provisions on liquidity risks, and do such provisions create a preference for sophisticated institutional contract holders?