In my previous post, I discussed my July 23 testimony at a public informational hearing of the Pennsylvania Insurance Department. The hearing was about the proposed sale by One Beacon Insurance Group of four of its subsidiaries, including One Beacon Insurance Company and Potomac Insurance Company.
The transcript of the entire hearing has since been posted to the Pennsylvania Insurance Department website, including my live testimony.
The transcript with my testimony (edited for typographical errors) can be found HERE .
In my oral presentation, I provided a short summary of my expert report that had been submitted in advance of the hearing, as well as some comments on the presentations by the actuaries, the Seller and the Applicant.
“The proposed transaction is the most opportunistic and most cynical insurance company restructuring I have ever seen.” (Page 116)
“The history of reserving for long-tail liabilities by insurance companies teaches us, indeed, to disbelieve actuarial estimates.” (Page 117)
“They go on to tell us, and this really, really amazes me … but they have forecasted that will start repaying surplus notes in 2018, just four years out into a multi-decade runoff.” (Page 134)
“They talk about complicated accounting and reporting. I mean, are we supposed to shed a tear for that?” (Page 136)
” … if they are so confident in the sophistication of their actuarial analysis and their financial projections, they should put their money where their mouth is.” (Page 138)
On July 26, 2014, the Department reopened the public comment period indefinitely to afford persons ample opportunity to provide written comments on the filing to the Department. KCIC invites you to comment on this important proposed transaction.
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Jonathan Terrell is the Founder and President of KCIC. He has more than 30 years of international financial services experience with a multi-disciplinary background in accounting, finance and insurance. Prior to founding KCIC in 2002, he worked at Zurich Financial Services, JP Morgan, and PriceWaterhouseCoopers.Learn More About Jonathan