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.     

Management of Scientific Staff at the Harwell Laboratory of the U. K. Atomic Energy Authority

Harwell's primary role. is to serve as the main research laboratory supporting the U. K. nuclear power development programme; in addition it undertakes research and development outside of the nuclear field for Government and industrial customers. Overall, there is the need to manage a very large number of separate and often disparate items of work and to ensure effective communication with senior managers of the nuclear power programme and with commercial customers on allocation of resources and technical progress. This is done through a version of "matrix management". A large proportion of the technical, commercial and staff management decisions are devolved within Harwell's matrix organisation where teams of staff required for particular items of R & D are formed by arrangements agreed locally between the two axes of the matrix. The smaller groupings of staff created in the matrix are important in providing environments where good staff management practices can be established and where a team spirit aids motivation and technical initiative.     

Espoused drum-buffer-rope flow control in serial lines: A comparative study of simulation models

This paper documents an investigation of drum-buffer-rope (DBR) scheduling and flow control methodology in single-product serial production lines. In particular, DBR flow control is reviewed and the importance of correctly representing this type of flow control mechanism in serial lines is discussed. Departures from valid DBR conceptual and simulation modeling are illustrated. It is shown that the model of a previously published paper is a push system not a DBR system, and that related conclusions regarding protective capacity and constraint location are unsupported. Correct modeling of DBR flow control is shown using discrete simulation experiments that compare the DBR model and a similar push model. Suggestions for additional research are offered.     

Futures sustainability

This article presents a strategic framework to guide public policy with respect to very long-term futures. The framework is based upon three fundamental principles. Threats to meeting the principles are assessed. Integrated planning responses to overcoming the threats are proposed. Significant changes in economic, political and social theory and organization required to support the strategic responses are discussed. It is argued that human civilization would need to pass through the mythic ‘singularity’ on the path to futures sustainability.     

Historical resources, uncertainty and preservation values: An application of option and optimal stopping models

State agencies and private historical organizations frequently acquire historical sites with unknown characteristics. In this paper, we provide two approaches to evaluating the preservation decision. In the first approach, we show that a historical site which is not permanently preserved provides citizens with a certain flexibility whose value can be measured as an option on the maximum between the current real estate value and the preservation value. In the second approach, we assume that the organization has an infinite planning horizon and chooses the optimal sale date. Using a contingent valuation estimate of the public's willingness to pay for preservation of a specific historical site and the real estate price, we provide simulation values of the preservation option value and the optimal stopping rule.