Metlife Inc (MET), Hartford Financial Services Group Inc (HIG): Life Gets Complicated for These Insurers

Reinsurance in the spotlight, again
Additionally, the superintendent of the New York Financial Services department, Benjamin Lawsky, is once again training a beam on life insurers’ use of reinsurance companies, often owned by the companies themselves. Often, these entities are used to stow liabilities from the parent company, making it look healthier than it may truly be.

The report, commissioned last year, identifies at least $48 billion in questionable transactions and calls for tighter regulations on this so-called captive insurance industry.

Though life insurers obviously have their troubles, many are now sitting near 52-week highs, probably based on investors’ knowledge that higher interest rates mean better returns on the insurers’ investments, upon which they rely for income. In juxtaposition to this, other issues appear much less important.

The article Life Gets Complicated for These Insurers originally appeared on Fool.com is written by Amanda Alix.

Fool contributor Amanda Alix has no position in any stocks mentioned. The Motley Fool recommends American International Group. The Motley Fool owns shares of American International Group and has the following options: Long Jan 2014 $25 Calls on American International Group.

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