Supreme Knight Statement about S&P Recent Downgrade 8/8/11'

This Video and article first appeared on 8/11/11 at: http://www.kofc.org/un/en/news/releases/detail/sandp_action.html

The action taken by Standard and Poor's on Monday, August 8, does not reflect in any way on the business operations or performance of the Knights of Columbus.  S&P’s action – as their statement indicates – was caused by the downgrade of the rating of the United States in response to this country’s debt crisis. According to S&P’s statement on the methodology for their decision “the U.S. sovereign credit rating constrains the long-term ratings on these U.S. insurers.” S&P’s latest release cites the “very strong financial profiles” and “favorable business profiles” of the Knights of Columbus and other insurers affected by their rating revision. In addition, they cite the benefit the Knights of Columbus has from our “affinity relationships with our policyholders.”

Because of our sound and ethical business practices and investment strategies, the Knights of Columbus is stronger today relative to the industry than it was five years ago. Over the past five years, the life insurance industry as a whole has seen a 6.8 percent decrease in sales. But during that same time, Knights of Columbus life insurance sales have grown by 20.7 percent. Since the financial crisis began in 2008, we have improved both operational performance and the credit quality of our investments. We continue to have the highest rating possible from A.M. Best (A++) and the highest rating S&P is able to give to any insurance company based in the United States (AA+). In short, there continues to be no more highly rated insurer in the United States than the Knights of Columbus, and our members can continue to have the highest confidence in our performance as a company and in the safety of the money that they have entrusted to us.

S&P Downgrades Five AAA-rated Insurers Heavily Invested In U.S. Debt

By Matthew Sturdevant

  on August 8, 2011 10:34 AM | Permalink | Comments (1) 

This article first appeared at: http://blogs.courant.com/connecticut_insurance/2011/08/five-aaarated-insurers-might-f.html

Five top-rated insurance companies that stack their investments heavily in U.S. debt were downgraded Monday by Standard & Poor's.

The insurers' reduced rating was tied to a downgrade of U.S. government debt on Friday, but it won't have a significant effect on the industry, according to a top insurance regulator.

Standard & Poor's put all AAA-rated insurers on credit watch in a July 15 notice, at the same time government debt was put on watch.

The companies include New Haven-based Knights of Columbus, New York Life Insurance Co., Northwestern Mutual Life Insurance Co., Teachers Insurance & Annuity Association of America (TIAA) and the United Services Automobile Association (USAA).

Knights of Columbus specializes in providing life insurance, annuities, long-term care coverage and disability insurance to Catholic families. Knights of Columbus has $80 billion in in-force life insurance, which is the face value of all existing policies.

"We're still one of the top rated insurers in the United States . . . we still have the absolute top rating from A.M. Best, and we have the top rating available in this environment to an insurer from S&P," said Knights of Columbus spokesman Andrew T. Walther.

"The rating is a rating if we were to issue debt," Walther said. "We don't issue debt. We don't intend to issue debt. We don't have any bonds out there."

The Debt Crisis explained:

What you don't know about long-term care may jeopardize your retirement.

Chances are you've put something away for retirement. But the truth is that your savings may be at risk from something you've never considered: the unexpected need for long-term care. Consider the facts:

• Over 70% of those who live to retirement age will need long-term care at some time in their lives.¹

• Medicare has limited long-term coverage,² TRICARE does not cover long-term care,³ and Medicaid only offers support after your assets are spent down to state-required levels.

• Receiving care in a nursing facility can cost as much as $75,000 a year.⁴

• In-home care averages over $19 an hour, not including home modifications you may need.⁴ 

1 U.S. Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008. 

2 America’s Health Insurance Plans, “Guide to Long-Term Care Insurance,” 2004.

3 TRICARE, “Long Term Care.” TRICARE. June 2009.

4 The national average of Nursing Home and Home Care from John Hancock Cost of Care Survey, November 2008.

Put away the rose colored glases

by Thomas P. Smith Jr. (first apperered at KofC.org on 7/11/11)

Ah, the old rose-colored glasses. You know the ones I’m talking about. I don’t wear them all of the time, but I keep them handy. They are always around when I need them.

Every summer when the Dallas Cowboys go to training camp (that’s right — I’m a Cowboy fan … go ahead and have your fun), I pull out my rose colored glasses and all the flaws that other people see in my team disappear. When I wait until the very last minute to go to the store to buy something I desperately need, I pop on my rose-colored glasses and convince myself that there is no need to worry — they’ll have what I’m looking for, it will be on sale, and there will be no line at the checkout. Life is good with those rose-colored glasses!

Football teams and shopping sprees are trivial matters. A crooked view of life through my glasses on those topics doesn’t hurt me much. But sometimes those glasses are big trouble.

You know you need life insurance. I know: it’s not a glitzy purchase … it’s not something you show off to your friends … but you know you need it. If you have some, chances are pretty good — great actually — that you need more. And you know why you need it. It’s all about your family. It’s not about you. It’s about them.

So, assuming you know you need it, and I know you need it, why aren’t we getting together to arrange for it? Those glasses.

The glasses go on and we decide to wait until tomorrow, because after all, nothing bad can happen today. And when nothing bad happens today, those glasses go on much easier and fit much better tomorrow, because, after all, if nothing went wrong yesterday, what are the chances that something will go wrong tomorrow?

You’re feeling good, you’re looking good, you’re loving life, and you have so many other, more important things to do with your hard earned cash. The only time you really think about life insurance, really, is when we call you. And for a brief second when that call comes in, or when you’re reading this column, or when you see your agent, you say to yourself: you know, I really need to take care of that. But then the glasses come out, slide over that nose, and suddenly, tomorrow is a better option than today.

In the end, thinking that the Dallas Cowboys are going to go 16–0 and win the Super Bowl every year is foolish, but not dangerous. Thinking that you have an unlimited supply of tomorrows to make a decision on securing the future for your wife and children and grandchildren is both foolish and dangerous.

Put away the glasses (temporarily) and talk with your agent. We’ll make your life really rosy.