"[1] Policyholder losses incurred due to insurer failure are expected to be very low, even before allowing for the presence of state guaranty systems.... [2] The credit risk priced into bonds issued by insurers is not equivalent to expected policyholder losses.... [3] NISA's approach does not allow for the substantial additional protection provided by separate accounts and by the State Guaranty Association system.... [4] Plan sponsor failure is generally much more likely than that of a well rated insurance company.... [5] Credit spreads on Funding Agreement Backed Notes have limited reliability as a metric."

MORE >>