Page 169 - Ready Set Retire

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due. These assets are kept intact for payment of living and
death benefits to the insured. The insurance company isn’t
backing your money, your money is!

If an insurance company’s reserve levels fall short and it cannot
correct the situation, it goes into receivership. The remaining
insurance companies in the state legal reserve pool must
assume the liabilities and obligations of the insurer. The reserve
pool protects fixed annuity investors and those who purchase
other life insurance products or policies.

Third, Legal Reserve Life Insurers are members of reinsurance
groups. If you purchase an annuity from Company A,
Company A has secured agreements from Companies B, C,
and D to help cover its liabilities. Each company has from four
to a dozen other companies backing its contracts.

Fourth, insurance companies don't have to comply with just
one governing body like banks, they must satisfy the safety
requirements of all 50 states. Every year all legal reserve life
insurance companies submit annual statements to the
insurance departments of each state in which they are licensed
to do business. These are detailed reports of an insurance
company's financial status important in evaluating the
company's solvency and compliance with the insurance laws.
Companies found not to comply with their reserve

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