NU Online News Service, July 10, 10:33 a.m. – Bond defaults and corporate scandals are starting to cause headaches for life insurance company chief financial officers.

Two-thirds of the 46 CFOs who participated in a recent informal survey by Tillinghast-Towers Perrin, New York, reported that their companies’ asset portfolios had suffered “moderate to significant defaults” in recent months, and more than one-third said that they were facing greater scrutiny of financial reporting practices, risk management practices and investment strategies.

Fifty-six percent of the CFOs’ companies will be changing internal business practices, and 37% have changed or will be changing auditors.

Despite the turmoil, the second quarter of 2002 was a good quarter for life insurance and annuity operations: more than 90% of the CFOs said revenue was up from the second quarter of 2001, and 70% said net income was up.