If two insurance companies have allegedly purchased these kinds of products, is it possible others have too? Is it possible some companies' ratings are therefore not deserved?
This article also described how the SEC is cracking down on financial-services companies that allegedly aid in fraud by helping companies manipulate their financial results.
In similar news, A.M. Best announced on Oct. 5, 2004 that even though P&C companies have increased reserves by $47 billion over the last three years, the industry's reserves remain deficient by as much as $67 billion! Considering that the top ten carriers only wrote $189 billion in net premiums in 2003 (which is a 47% market share), a $67 billion reserve inadequacy suggests strongly to me that some companies, in reality, are insolvent and they just have not had to admit it yet.
Combining these two stories, both authored by impeccable sources, one should wonder just how stable some companies really are. How stable are your companies? Are all ratings deserved? Is it time to investigate your companies' stabilities? Is it time to begin diversifying?