Debt Ceiling Deadline Raising Interesting Questions for Insurers

S&P announced today that they may downgrade some insurers if the debt ceiling is not raised. Mainly because of the high amount of investment capital insurers have tied up in US Treasury bonds. I find this incredibly interesting that an solid operating insurer can be downgraded because the FED cannot get their fiscal house in order. S&P didn't do such a good job back in 2008 when the mortgage backed securities tanked so I am not  inclined to take any S&P's downgrade as relevant. However insurance company execs have to. A downgrade could affect their ability to write business. I am not sure what the solution is here if the debt ceiling is not raised. Stay tuned. Until next time be careful out there and know your risks. K

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