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EU Insurers Could Shift Losses to Life Policyholders (AdvisorOne)

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European insurers suffering losses from sovereign debt writedowns could pass the burden onto their policyholders.

A majority of bonds held by insurers in the European Union are used to back “with profits” life insurance policies, in which gains and losses are shared by both the customers and insurers. That means insurers could pass losses from Greek, Spanish, Italian, Irish and Portuguese bonds onto customers.