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In a large sample of private credit agreements of publicly traded firms, nearly all agreements contain at least a boilerplate provision requiring the borrower to purchase insurance. In about 80 percent of the agreements, the insurance covenant is more explicit. Four additional features of the insurance covenant are quite common: requirements of coverage for specific risks, naming the lender as a loss payee, mandating that any insurance proceeds be used to repay the loan, and explicit permission for the borrower to self-insure. Credit agreements contain more stringent insurance requirements for borrowers that pose higher credit risk. The insurance requirements are strongly positively correlated with the loan being secured by collateral, which suggests that insurance creates value by protecting lenders from unexpected changes in seniority that might happen following the destruction of collateral. Insurance covenants are an important ingredient of credit agreements designed to create a very safe claim for senior, secured lenders., INTRODUCTION Corporate credit agreements frequently require the borrower to purchase insurance, providing one answer to the long-debated question why publicly traded corporations would demand insurance. Since the seminal work of [...]

It's not every day that a push for more regulation can be construed as a pro-insurance-industry move. But some within the fledgling life settlement industry hope that pro-consumer legislation in [...]

The federal/state Medicaid program is designed to provide health insurance for the nation's poorest, yet between 15 and 20 percent of the population continue to have no health insurance. Classic utility-based insurance theory is examined to see if it well explains why some do and some do not purchase health insurance at the state level or if a host of other non-economic factors are needed. This pooled, cross-sectional time-series analysis shows that the state characteristics most strongly associated with the prevalence of a lack of health insurance is the percent of persons whose income falls below the poverty line, the percent of the state's population that is female and the percent of the population with only a high school education. This analysis suggests that the starting point for policies aimed at limiting the number of insured should be limiting poverty and perhaps recognizing the gender/education influence in designing state eligibility requirements. (JEL I18, I10), Introduction Allegedly the following exchange occurred. 'You know, Ernest, the rich are different from us,' said F. Scott Fitzgerald. 'Yes, I know. They have more money than we do,' responded [...]

Health care benefits are becoming increasingly important in the struggle to keep good employees. Are you aware of all your options? It seems like things were so much simpler just [...]

Handling an Uncooperative Insured In the discussion of the scope of a defense lawyer's retention in Chapter II, it was emphasized that defense lawyers are not engaged to handle coverage [...]

INTRODUCTION While the human toll of the September 11, 2001, terrorist attacks, remain incalculable, the process of assessing the attacks economic consequences and working to rebuild and recover from them [...]

BECAUSE OF ITS TAX-FAVORED TREATMENT, permanent life insurance has long been touted as an ideal vehicle with which to retire estate tax liabilities. But purchasing a large enough policy to [...]

Late policy issuance is still the norm in London, not the exception, despite the lessons of the World Trade Center coverage dispute, according to London market underwriters. However, these underwriters [...]

Hours before it was scheduled to expire on Aug. 1, Congress voted to extend the National Flood Insurance Program (NFIP) through Nov. 30. Despite the extension, many critics still believe [...]

Byline: Lindsay Chappell One year ago, as soon as Hurricane Sandy had finished beating the Atlantic coast and rolled back out to sea, car dealers across the New York-New Jersey [...]

Byline: Jane Bernstein When it comes to combating insurance fraud, much of the focus historically has centred on the claims stage. More recently, the debate has begun to highlight anti-fraud [...]

The deadline to tender residential mortgage-backed securities insured by Syncora Guarantee Inc. has once again been extended, to 11:59 p.m. EDT June 22 from 11:59 p.m. June 19. The tender [...]

More advisers need to ensure their clients' protection policies are written in trust, according to Aegon. According to the provider's latest IFA Insights research currently only one-quarter of protection policies [...]

Byline: ZACK PHILLIPS As concerns rise about the financial stability of some insurers, risk managers are using various methods to address insurer solvency risks, say risk managers and other observers. [...]

Bupa Individual Protection has made a number of enhancements to its critical illness policies including extended cover and removing age limits for a wide range of conditions. The offer of [...]

Prudential has come under fire from Aviva for giving an alleged one-sided argument about severity-based cover. In a recent article in Financial Adviser (5 March) Kevin Carr, director of protection [...]

Customers on mortgage tracker deals could be paying over the odds for mortgage payment protection insurance, an independent provider has warned. MPPI provider Paymentcare.co.uk said those who have standalone insurance [...]

As the life settlement industry grows at an accelerating pace, an increasing number of life insurance producers are opting to transact directly with life settlement providers companies that actively purchase [...]

Grab the opportunities presented to income protection by the PPI scandal The latest Competition Commission report into the ongoing failings of payment protection insurance painted a damning picture of a […]

Asking protection clients to check copies of their application forms can help give them a better understanding of their policies and ensure more accurate information, reports Kate Mallord Bright Grey […]

by Nick Telfer Income protection insurance is nothing new, with roots back in the era of Victorian philanthropy. As in the 19th century, there is still an unquestionable need for [...]

Honest answers To an actuary numbers and facts are all and the marketing spin often goes right over their heads (or more likely below them). Lurking on The Actuarial Professions [...]

The FSA has been accused of dumbing down the rules by allowing Icob advisers to sell life insurance policies maturing beyond age 70. Norwest Consultants principal Harry Katz says he […]

British insurance.com managing director Simon Burgess says the pro- advice lobby has been loud in championing the cause of the consumer but it is time to air the opposite view […]

Lifesearch head of protection strategy Kevin Carr says consumers will not pay fees for advice on protection products as they do not see the value in it. Carr says protection […]