Colleagues have written a great package of articles about the sad story of Executive Life Insurance Company of New York (ELNY) — a failed life insurer that was put in a woefully unsuccessful receivership.
Because of asset shortfalls, New York state insurance regulators will be cutting the income payments made to some severely disabled beneficiaries of structured settlement arrangements by as much as 60 percent.
The insureds, their families, their lawyers and the National Structured Settlements Trade Association are horrified by the haircuts.
I think one important point to keep in mind about the ELNY package is that you ain’t seen nothing yet.
The developed countries of the world, and, in part because of regulatory pressure, their financial services companies have promised to pay out each dollar to several different people over the next few decades.
Maybe the developed country economies will somehow make good on those extravagant promises by becoming much more productive and generating many extra dollars that can be used to meet the promises.
But, if the countries don’t dramatically increase their gross domestic product growth, then countries will find that, whether inflationary tricks they pull to try to make it look on paper as if they have the right number of dollars (or euros, or yen) to make pension payments, pay for retiree health care, make good on life insurance and annuity promises, and cover the basic costs of running civilization, in reality, we may not have enough suitable houses, high-quality food, high-quality hospital beds, primary care doctor appointment slots, high-quality school seats, gasoline, electricity, defense resources, public safety resources or retail merchandise to meet demand in the way that we’d expected.