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According to The Standard

Erin L. Ayers Editor

Sara Jacobi Staff Writer

Barbara S. Crockett Advertising Manager

Nakeesha Warner Production Coordinator

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John C. Cross, Esq. Publisher

Hearing the Message

“Maybe AIG was going to the movies too often and issuing life insurance policies on vampires. When the vampires start dying, that’s when you’re in trouble.” That’s how Congressman Barney Frank opted to ex- plain American International Group’s engagement in credit default swaps during his recent speech to the National Conference of Insurance Legislators

(NCOIL).

Erin L. Ayers
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As much as I enjoy pop culture references, I rarely enjoy being reminded of the publishing and cinematic travesty that is the “Twilight” series. However, the idea of vampire life insurance policies makes some sense as an analogy to mortgage-backed securities. Clearly, unless there are wooden stakes or sunlight around, vampires have a fairly long life span. The flaw, Frank commented, was the idea that the value of homes couldn’t possibly drop, that the housing boom was so robust, it seemed like an insurance policy the insurer would never have to pay.

Or something likes that. Frank could have been simply joking. Regardless, the insurance community should take his comments on the expected debate over optional federal chartering seriously. With health care reform and financial regulation at a different stage, the implementation stage, Congress now has more time on its hands and more energy to devote to additional changes in the insurance field. It’s clear that some federal lawmakers don’t feel they’ve done enough to insurance.

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While attending the NCOIL event, it appeared – revealed through some specialized journalistic tactics, also known as eavesdropping near the muffin and bagel table – that some of the lawmakers were entirely unimpressed by the idea of Rep. Frank and his commentary. That may be the personal opinion of some, but for as long as Democrats hold power in Congress, Frank will be a significant force on the Financial Services Committee. It makes sense for the insurance industry to pay attention to his views and hints as to the way the debate over the OFC will unfold.

—ELA

www.spcpub.com

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