Abstract
AbstractSince 1984, the year in which the last and, some would argue, the worst insurance underwriting cycle “bottomed out,” an average of twenty property casualty companies per year have suffered insolvencies. The House Oversight and Investigative Subcommittee has issued a report that is highly critical of the ways in which the solvency of insurers is regulated by the states, comparing the current situation in the insurance industry to the early period of the S&L crisis.While current solvency regulation may be imperfect, to assert that the insurance industry is on a track towards an S&L style crash is farfetched. This article examines that assertion, and presents indicators that corporate finance people should look for when trying to gauge the solidity of an insurer.
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