Asset Allocation

Which Insurance Carriers Failed since the 2008 Meltdown?

These are the companies that have gone into insolvency since 2008 according to the National Organization of Life and Health Guarantee Associations.  Property and Casualty companies are not included in this list.  Some, such as Exec Life of New York, and Penn Treaty had their origin long before the crisis.  As you can see, no very large companies are on the list.  Overall, life insurers came through the crisis in remarkable shape.  For more, you can google NOLHGA.

2008 Lincoln Memorial Life Insurance Company
2009 American Network Insurance Company *
2009 Medical Savings Insurance Company
2009 Old Standard Life Insurance Company
2009 Penn Treaty Network America Insurance Company *
2010 Booker T Washington Insurance Company, Inc.
2010 Imerica Life and Health Insurance Company
2010 National States Insurance Company
2010 Universal Life Insurance Company
2011 Golden State Mutual Life Insurance Company
2012 Standard Life Insurance Company of Indiana
2013 Executive Life Insurance Company of New York
2013 Lumbermens Mutual Casualty Company
2013 Universal Health Care Insurance Company, Inc.


Asset Allocation

May 2019 ETF Cash Outflows Biggest in History

Investors dumped $20 billion in assets during May, 2019 due apparently to concerns about the global economic outlook amidst Trump’s ramped up trade war with China and other tariff threats. Meanwhile, the Fed’s indication that it may cut interest rates further fueled concerns about the slowdown in global economic growth. Said macro analyst Tavi Costa of Crescat Capital, ” “Rate-cuts when late in the business cycle have never been a bullish sign. It reaffirms the many bearish macro signals we have been pointing out. Economic conditions are weakening in the face of asset bubbles everywhere.” Investors are flocking to safe-havens like Treasuries, corporate bonds, and, as data shows the trend continuing from 2018, bond-alternatives like fixed indexed annuities and indexed universal life insurance policies.

Contact me now to discuss review of your current allocations and planning. Nothing is sure but change in this new age.

Asset Allocation

The Death Knell for Stretch IRAs Has Tolled:

On May 23, 2019, the U.S. House of Representatives passed H.R. 1994, also known as the SECURE Act. The Senate is expected to pass a similar bill known as the Retirement Enhancement Savings Act, aka RESA.
Key provisions of the SECURE Act include:
-Increasing the beginning date for required minimum distributions (RMDs) from 70 ½ to 72;
-Repealing the maximum age for contributions to traditional IRAs;
-Adding exceptions for penalty-free withdrawals by an account owner; and
-Requiring certain beneficiaries to withdraw inherited account balances within 10 years of the account owner’s death.

The requirements of this last bullet point has estate planning attorneys concerned. Currently, “life expectancy” rules effective when an account owner dies allow non-spouse beneficiaries to “stretch” required minimum distributions (RMDs) over their individual life expectancies. So, many estate planners include “conduit” provisions in their clients’ trusts to ensure the trust will qualify as a designated beneficiary of a retirement account, even though the RMDs are still passed through to the trust’s primary beneficiary using their life expectancy and taxed as income to that beneficiary. The new law will make conduit trusts ineffective after 10 years.