(Dis)Honorable Mention
Photo © By United States Federal Reserve (Obtained via email from Federal Reserve OPA.) [Public domain], via Wikimedia Commons
No.
5
Jon Corzine for driving MF Global
into bankruptcy and further weakening confidence in the investor
system. Really, you should never
double down like that with other
people’s money. You’d think a guy
like Corzine would have known,
especially given the things he was
investing in. We figure he’s a shoe-in
for voting the euro in as a rogue. He
didn’t make the list because his impact on the life and health industry
is too indirect. He’s clearly a rogue
to the financial services industry at
large, and honestly, the guy should
be forbidden from futzing with the
investing world in general. He’s been
involved in at least two major financial disasters (let’s not forget his role
in the Long-Term Capital Management failure) and anybody whose
fingers are this dirty is just going to
make a mess wherever he goes.
Ben Bernanke
FeDeral reserve CHair-
Man ben bernanke For
His work to keep interest
rates artiFiCially low.
While he’s doing it to try to help the
larger economy, it’s starving anybody
who has written large books of annu-
ity, long-term disability and long-term
care insurance. As such, the industry
is trying to push for riskier financial
strategies to make up the difference…
which could have catastrophic con-
sequences. The sale of annuities now
accounts for about half of the life and
health industry’s total income (with
health/disability insurance accounting
for about a quarter, and life insur-
ance accounting for slightly less than
health insurance does). With that in
mind, annuities, it could be said, are
the primary financing mechanism for
the new American Dream—not to get
your own house or your own business,
but to retire. For companies selling a
huge amount of annuity business (and
who isn’t?), the low rates are killing the
ability to grow capital at the rate that
matches the liabilities posed by all of
the annuities that are out there. Both
Asia and Europe are hitting alarm bells
over the ever-widening gap between
what insurers are obligated to pay their
annuitants and what they have on hand
to pay with. True, the industry got itself
into this situation by taking on what
has amounted to a very big long-tail
obligation, but Bernanke’s efforts to
keep things low are turning the single
greatest drive for retirement in human
history into the life and health indus-
try’s version of the asbestos fiasco
that has left noticeable scars on the
property & casualty world. Don’t say
we didn’t warn you.
