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The Time-Money Continuum
Everyone has heard that time is money, but it may be that no industry understands this concept as well or as thoroughly as the insurance industry. To be profitable, annuities must be sold at a price that, given expected investment performance on the premiums, will more than sustain the income streams promised in the annuity contracts. Life insurance premiums must, given the investment performance expected on the premiums and the mortality experience expected for the pool of insured persons, more than support the expected payments to beneficiaries. Liability and casualty insurance premiums must, given the investment performance expected on the premiums, be more than adequate to pay expected claims. The “more than” concept in all these examples is the key to the profitability of these products for insurers. In short, insurance involves a lot of math.
Insurance companies, accordingly, employ large numbers of accountants, actuaries, economists and others with mathematical training, and they understand the time-money continuum in the way that theoretical physicists understand the interchangeability of time and space. Insurers also understand that, consistent with the very nature of insurance, claims are inevitable. Although the impact of time on money is fundamental to the operation and viability of the insurance industry, and although the inevitability of claims is a given in the industry, it is not always evident that insurers appropriately account to their policyholders for the time value of money when valuing and paying casualty or liability claims, or that policyholders insist that they do so.
The DOJ's Corporate Enforcement Policy: One Year Later
The DOJ's Criminal Division issued three declinations since the issuance of the revised CEP a year ago. Review of these cases gives insight into DOJ's implementation of the new policy in practice.
The DOJ's New Parameters for Evaluating Corporate Compliance Programs
The parameters set forth in the DOJ's memorandum have implications not only for the government's evaluation of compliance programs in the context of criminal charging decisions, but also for how defense counsel structure their conference-room advocacy seeking declinations or lesser sanctions in both criminal and civil investigations.
Use of Deferred Prosecution Agreements In White Collar Investigations
This article discusses the practical and policy reasons for the use of DPAs and NPAs in white-collar criminal investigations, and considers the NDAA's new reporting provision and its relationship with other efforts to enhance transparency in DOJ decision-making.
Bankruptcy Sales: Finding a Diamond In the Rough
There is no efficient market for the sale of bankruptcy assets. Inefficient markets yield a transactional drag, potentially dampening the ability of debtors and trustees to maximize value for creditors. This article identifies ways in which investors may more easily discover bankruptcy asset sales.
Compliance Officers: Recent Regulatory Guidance and Enforcement Actions and Mitigating the Risk of Personal Liability
This article explores legal developments over the past year that may impact compliance officer personal liability.