Oh what a tangled web
Our friend Jeff M sent along this (poorly written) article about the sometimes duplicitous world of reinsurance:
'A businessman and political donor ... has been sued by Universal Life Insurance Company (ULICO) over a personal guaranty Lindberg made to back PB Life and Annuity Company.'
It appears that the companies had come together to form a reinsurance agreement (this is essentially a contract that helps minimize risks that carriers take on, more here). and it seems that one of the parties has been ... negligent ... in holding up his end:
'ULICO alleged that PB Life was not in compliance with the reinsurance agreement because 65% of the investments of the trust fund were in loan obligations to affiliates of PB Life which exceeded the threshold of 10% established by the insurance code.'
As FoIB (and extremely knowledgeable carrier rep) Brian D explains:
'This guy doesn’t stand a chance. PB Life is out of compliance. The worst part of this (agreed it’s a poorly written) story is what Lindberg’s connection is to PB Life and why he would ever personally guarantee a loan of that size. Seems ridiculous. But as a reinsurance entity, you cannot have 65% of your assets in loan obligations. Not in this economy. That is insane.'
Oh, I think we can tell right away why Mr Lindberg agreed to underwrite this out of pocket.
Will be interesting to see how this plays out.
Stay tuned....
'A businessman and political donor ... has been sued by Universal Life Insurance Company (ULICO) over a personal guaranty Lindberg made to back PB Life and Annuity Company.'
It appears that the companies had come together to form a reinsurance agreement (this is essentially a contract that helps minimize risks that carriers take on, more here). and it seems that one of the parties has been ... negligent ... in holding up his end:
'ULICO alleged that PB Life was not in compliance with the reinsurance agreement because 65% of the investments of the trust fund were in loan obligations to affiliates of PB Life which exceeded the threshold of 10% established by the insurance code.'
As FoIB (and extremely knowledgeable carrier rep) Brian D explains:
'This guy doesn’t stand a chance. PB Life is out of compliance. The worst part of this (agreed it’s a poorly written) story is what Lindberg’s connection is to PB Life and why he would ever personally guarantee a loan of that size. Seems ridiculous. But as a reinsurance entity, you cannot have 65% of your assets in loan obligations. Not in this economy. That is insane.'
Oh, I think we can tell right away why Mr Lindberg agreed to underwrite this out of pocket.
Will be interesting to see how this plays out.
Stay tuned....
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