Life Insurance Stock Companies

[Policyholder@xxxxxxx]

Major U.S. life insurance stock companies took a major hit in the market
Friday including Metropolitan and Prudential, which have recently
demutualized, and A.I.G.,
a stock company which has been a bellwether and the most profitable the past
20 years.  Reduced earnings from investments is cited as the basic cause,
although life insurance sales remain weak in the US and Europe and Japan as
well. Stock companies were hit hard by 9/11 not only for their exposure to
claims but for large investments in airline corporate bonds.  Furthermore
stock companies had major investments in Enron and other corporate scandals.
Mutual companies were not hit as hard and their capital accumulations remain
relatively safe from these manipulations.
    It is recognized in the business that the timing could not have been
worse for these demutualizations.  Others question the passage in 2000 of the
Financial Modernization Act replacing the Glass-Steagall Act which both
abolished the "fire walls" between insurance companies and other financial
institution as well as permitting insurance companies to move to anther state
if their state of domicile prohibited demutualization.
     It has been pointed out that insurance companies were a stabilizing
force during the Great Depression.  Fear has been recently expressed that
recent demutualized companies do not offer this same guarantees of security
and peace of mind.
                                                                 Richard A.
Norton