I wrote a really scary article a couple of days ago that has not exactly made a big splash out there.
In the article, executives from StanCorp Financial Group (NYSE:SFG) – the parent of Standard Insurance — talk about how they have to cut long-term disability (LTD) insurance discount rate assumptions, increase disability insurance costs, and assume as a given that sales will drop sharply because of the current low interest rate environment.
In other words: First low rates came for shaky long-term care insurance (LTCI) companies that no one liked very much anyway, and, surprise, surprise, caused those insurers to have problems.
The low rates came for the somewhat more respectable LTCI companies, but, hey, they had the actuarial projections wrong.
Then they came for the universal life products with secondary guarantees, and the issuers of annuities — and, wait: those are core products. Aren’t they?
Now they’re coming for the kinds of salt-of-the-earth products that the Federal Reserve System must be providing for its own employees.
I love some kinds of good-natured conspiracy theories but generally hate the ones involving the Fed.
If there’s a giant system of cross-continental tunnels under the surface of the United States: Cool. Hope they shake my bed.
If President Obama really was a CIA agent back when he was supposed to be in college, and he somehow ran part or all of the U.S. operations in Pakistan: I eagerly await the docudrama.