About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


6 J. Ins. Regul. 1 (1987-1988)

handle is hein.journals/jloins6 and id is 1 raw text is: Editor's Perspective The first three articles of this issue examine the theories and pitfalls of some of the more innovative investment strategies of the '80s. Our lead article by William Smythe, Executive Director of the NAIC SSO Office, has expanded on a presentation he first made to insurance commissioners about junk bonds.' After first cautioning that the term junk bonds is a misnomer, he presents a background of the theory that has persuaded financial institutions, other than insurers, to find a place in their portfolios for these below-investment grade bonds. He notes special precautions that insurers should take and traces the regulatory approaches that two states have already taken-Arizona and New York. The second article complements nicely Bill Smythe's analysis. Terence Lennon, Chief Life Examiner for the New York Department, explains the New York ap- proach in greater detail.2 The third article offers quite a different investment strategy. As a result of her internship working in the Chicago futures market, Professor Joan Lamm-Tennant suggests that hedging T-bond futures might be an effective investment strategy, provided certain precautions are taken.3 She elaborates on potential pitfalls and suggests additional areas for research. One of the most ambitious efforts to examine the tort/liability/in- surance crisis is surely the Texas Closed Claims study. Results of that survey have been studied carefully by all segments of the property/lia- bility industry. We present here in full the first two parts of that four- part study (the two portions that have wide-spread application).4 Al- though the second part presents the nuts and bolts of the findings, our readers will want first to examine carefully the first part which explains both what the study attempts to do and what it does not or can not do. 1. Infra at 4. 2. Infra at 16. 3. Infra at 20. 4. Infra at 35.