United States Government Publishing Office publisher pbl distributor dst United States Government Accountability Office General Government Division author aut Government Organization text government publication eng GAOREPORTS Legislative Agency Publications gao legislative 2010-08-12 U.S. Government Printing Office 1995-03-22 monographic deposited born digital 22 p. GA 1.13:GGD-95-95 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-95-95 P0b002ee18039be63 f:gg95095 DGPO 2010-08-12 2011-03-24 GAOREPORTS-GGD-95-95 machine generated eng fdlp REPORT GAOREPORTS-GGD-95-95 GGD-95-95 Life insurance Insurance companies Insurance regulation Loans Financial statement audits Loan repayments Real estate purchases Investments Financial disclosure reporting Regulatory agencies Letter Report GGD

Pursuant to a congressional request, GAO examined the placing of Monarch Life Insurance Company in receivership, focusing on: (1) whether the actions of the parent holding company or affiliated companies endangered the solvency of Monarch Life; and (2) the adequacy of regulatory oversight leading up to the insurance receivership.<p/>GAO found that: (1) the holding company pledged Monarch Life stock as collateral on a loan which endangered its solvency and led to the regulatory takeover by the holding company's creditors; (2) the holding company diverted about $165 million from Monarch Life to fund its real estate activities, but it was unable to repay the loan; (3) Monarch Life also lost $54 million in real estate investments and faced additional risk by acting as a loan guarantor for the holding company's real estate operations; (4) the Massachusetts Division of Insurance was unaware of Monarch Life's solvency problems until November 1990, when the holding company disclosed its inability to repay its loans; (5) previous regulatory examinations of Monarch Life's financial statements did not reveal its solvency problems due to inadequate information on interaffiliate transactions; (6) once the holding company publicly announced that its financial condition endangered Monarch Life's solvency, state regulators acted quickly to protect the insurance policyholders; and (7) although the state expanded its regulatory authority to prevent abusive interaffiliate transactions between insurance companies, it continues to rely on insurer disclosure to enforce insurance holding company laws. https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-95-95/html/GAOREPORTS-GGD-95-95.htm https://www.govinfo.gov/content/pkg/GAOREPORTS-GGD-95-95/pdf/GAOREPORTS-GGD-95-95.pdf GAO/GGD-95-95 https://www.govinfo.gov/app/details/GAOREPORTS-GGD-95-95 Letter Report GAO/GGD-95-95; Insurance Regulation: Observations on the Receivership of Monarch Life Insurance Company; Life insurance Insurance companies Insurance regulation Loans Financial statement audits Loan repayments Real estate purchases Investments Financial disclosure reporting Regulatory agencies Title 18 Section 1033 18 U.S.C. 1033 S. Rept. 103-29