AT THE CROSSROADS: THE LIFE INSURANCE INDUSTRY AND FINANCIAL SERVICES REFORM

Abstract: In September of 1996, The Board of Directors of the American Council of Life Insurance ("ACLI")reversed decades of policy and embraced for the first time the concept of reciprocal ownership or "affiliations" between life insurance companies and commercial banks. Under this new policy mandate, the ACLI is advocating federal legislation that would permit banks to sell all types of insurance and control insurance underwriters through separate affiliates or subsidiaries. In return, 1) insurers would have the authority to acquire banks; 2) the insurance activities of banks would be fully subject to state insurance regulation; and 3) federal bank regulators would be precluded from preempting state regulatory authority.
This article reviews the various factors that precipitated this watershed policy decision, discusses the structural and regulatory issues that are important to life insurers, and speculates briefly on the prospects for financial services legislation.     

THE INSURANCE PERFORMANCE MEASURE: BRINGING VALUE TO THE INSURANCE INDUSTRY

The performance of the property and casualty (P&C) insurance industry has suffered in recent years, even prior to the losses incurred in the tragic events of September 11th. Part of the industry's difficulties stems from its focus on premium generation, as measured by the combined or underwriting ratio, at the expense of overall operational performance. In this regard, the underwriting ratio is an incomplete measure of operating performance since it ignores two critical P&C operational functions: investment return and reinsurance results.
In this article, the authors present their Insurance Performance Measure (IPM), a comprehensive performance measure for the P&C industry. The IPM captures the three critical operational functions mentioned above in an overall performance measure. The measure is also versatile in that it can be easily decomposed into critical value drivers in each area of operation. Thus, the IPM framework enables P&C managers to observe the interaction and trade-offs between the operational functions of premium generation, investment return, and reinsurance results separately or as a group, and as they relate to the opportunity cost of surplus.     

监管之手引导保险业前行

“今年保险业的主旋律是保险法修改、保险公司股份制改造、车险费率市场化改革和保险市场良性发展初现端倪。”2002年末,时任北京大学经济学院保险系主任的孙祁祥教授在接受记者采访时说,未来一年保险市场发展中最值得关注的热点将是保险公司改制上市问题,而且创新会成为保险业未来发展的一个主旋律。     

金融业全面开放:大幕拉开

5这个似乎既不代表“发”(8),也不象征“久”(9)和“顺”(6)的数字对于由共产党领导的中国却具有非同寻常的意义。党的代表大会是5年一次,国家发展规划是5年一订,中国的国旗是5星旗,5对中国人而言绝不是也不应该仅仅是一次“轮回”或一个静态的画面,而是承负着阶梯式的增长,寄托着梦幻般的希望。也许正是因为如此,WTO给予中国全面开放的准备期也是5年,世贸组织希望5带     

DISTRIBUTIONS OF FINANCIAL RATIOS IN THE COMMERCIAL BANKING INDUSTRY

Much research in banking assumes that the data are normally distributed. There has been little empirical confirmation of this assumption. In this paper, the normality assumption is subjected to an extensive test using data for virtually all U.S. commercial banks for several years. The statistical characteristics of 11 common financial ratios are investigated. The findings reject any broad assumption of population normality.