Key Takeaways
- • Brookfield's 2024 acquisition of American Equity was followed within roughly six months by $580.3 million in lending to Brookfield-related borrowers, according to Iowa's own regulatory exam as cited in the article.
- • The Capitol Forum reports that a Vermont captive insurer showed $94 million of surplus, which would fall to roughly -$1.5 billion after removing one reinsurance contract counted as an asset.
- • The author argues the arrangements are legal and regulator-approved, but Vermont keeps captive statements confidential, limiting outside verification of capital adequacy.
- • The article cites recent insurer failures and receiverships, including Lindberg (2019), PHL Variable (2024), and South Carolina's pending action against A-Cap, as evidence of a continuing pattern.
- • The piece identifies retirees holding over $250,000 in a single annuity and pensioners moved out of federal protection as the parties most exposed to a future failure.
Summary
A Substack essay in the "Insurance Failures" series examines whether the insurance-company failures of past decades are recurring today. The author, who frames the piece as a follow-up to a review of five historical insurance disasters, argues that the warning signs are visible in current regulatory filings.
The central example is Brookfield's 2024 acquisition of American Equity. According to the article, within about six months the insurer had lent $580.3 million to Brookfield-related borrowers, a figure the author attributes to Iowa's own examination report. The article presents this as a related-party exposure that merits scrutiny.
The article also points to a Vermont captive insurer. Citing The Capitol Forum, it reports $94 million of reported surplus, which the author says would become roughly negative $1.5 billion if a single reinsurance contract counted as an asset were removed. The author notes that these arrangements are legal and approved by a regulator, but that Vermont keeps captive statements confidential, so outside parties cannot independently check the capital position. The author compares this to the 1973 Equity Funding fraud, in which paperwork was forged to make capital appear.
To support the claim that the pattern is continuing, the article lists recent insolvencies and regulatory actions: the Lindberg case in 2019, PHL Variable in 2024, and South Carolina's pursuit of A-Cap in the current year. The author concludes that the people most affected by a failure would be retirees with annuity balances above $250,000, pensioners whose employers moved them outside federal protection, and annuitants awaiting payments while courts resolve claims. The article's claims about the Brookfield and Vermont figures are presented by the author and have not been independently confirmed in this source.
The central example is Brookfield's 2024 acquisition of American Equity. According to the article, within about six months the insurer had lent $580.3 million to Brookfield-related borrowers, a figure the author attributes to Iowa's own examination report. The article presents this as a related-party exposure that merits scrutiny.
The article also points to a Vermont captive insurer. Citing The Capitol Forum, it reports $94 million of reported surplus, which the author says would become roughly negative $1.5 billion if a single reinsurance contract counted as an asset were removed. The author notes that these arrangements are legal and approved by a regulator, but that Vermont keeps captive statements confidential, so outside parties cannot independently check the capital position. The author compares this to the 1973 Equity Funding fraud, in which paperwork was forged to make capital appear.
To support the claim that the pattern is continuing, the article lists recent insolvencies and regulatory actions: the Lindberg case in 2019, PHL Variable in 2024, and South Carolina's pursuit of A-Cap in the current year. The author concludes that the people most affected by a failure would be retirees with annuity balances above $250,000, pensioners whose employers moved them outside federal protection, and annuitants awaiting payments while courts resolve claims. The article's claims about the Brookfield and Vermont figures are presented by the author and have not been independently confirmed in this source.
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