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Life Carriers Face $4 Billion In Enron Exposure

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NU Online News Service, Dec. 11, 11:45 a.m. – The U.S. life insurance industry had about $3.9 billion in direct exposure to Enron Corp., Houston, at the end of 2000, according to Moody’s Investors Service, New York, says.

Though substantial in dollars, this amounts to less than 2% of the consolidated statutory capital base of Moody’s rated U.S. life insurance universe, the rating service notes.

Moody’s says it believes Enron exposure will have little effect on the life insurer credit ratings.

The firm says the heaviest exposures among life insurers were held by John Hancock Financial Services Inc., Boston ($360 million); Prudential Financial Inc., Newark, N.J. ($311 million); the life operations at American International Group Inc., New York($255 million, excluding another $79 million at its recent acquisition, American General); AEGON N.V., The Hague, Netherlands ($217 million); and New York Life Insurance Company, New York ($197 million).

Twenty-three life insurance groups had an exposure in excess of $50 million, and an additional 11 companies have an exposure of between $25 million and $50 million, Moody’s says.