Direct online access to the TSR Ratio™ reports
If the companies you need to know about are not there, simply request their addition, and in fourteen days, their TSR Ratio™ report will be included.
For seasoned and serious advisors. Introducing a fast and effective way to assess your client’s annuity and life insurance company counterparty risk.
Private equity firms are using increasingly complex financial engineering to discount liabilities and enhance yields on investment strategies that are much less traditional than in the past. They're doing so with dollars placed in insurance products such as annuities and life insurance. As a conscientious advisor, you need a tool that sheds light on this very real and serious risk. This critical three-page report compiled by specialized forensic accountant Tom Gober uses each company’s own annual sworn statement to pinpoint troubled reinsurance and excessive risk issues relative to the company’s stated surplus. The TSR Ratio™ is mathematically represented as follows:
Opaque and affiliated reinsurance + riskier assets (defined by Fed Reserve and NAIC) |
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= TSR Ratio™ |
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reported surplus in the company’s most recent annual sworn statement |
For 35 years Tom has been fighting to protect insurance policyholders. His policyholder protection expertise runs the gamut of insurance operations - primarily insurance company failures to act in good faith, including claims delays or denials, false advertising, and misrepresentation of policy benefits.
Most recently, Mr. Gober has exposed a significant increase in false financial reporting to disguise their hazardous financial condition. Mr. Gober serves some of the most respected attorneys in the country helping policyholders find justice.
Tom is the expert that law enforcement relied on for education and consultation with agents to prove fraud in the AIG criminal case. He is also a former regulator in a state where his last official act was to get his boss’s wealthy friends jailed for insurance fraud. Tom is a champion to the policyholder and a true believer in the benefits of life insurance and annuities.
When insurance companies do it right and are respectful of their policyholders’ money, life insurance and annuities play a vital role in a solid financial plan.
Tom is the go-to expert for top lawyers, the financial media, and law enforcement when life insurance and annuity companies have balance-sheet issues that require expert investigation for fraud and wrongdoing. His work has been done in the courtroom, in the field undercover, and reported widely in the financial media.
The TSR Ratio™ was created when Tom Gober and Matt Zagula, the founder of the SMART Advisor Network and a known advocate and product developer for mutual and fraternal companies, joined forces to expose troubling risk-shifting and aggressive asset-purchasing patterns as they became more common from stock-owned insurance companies and even more so from private equity-owned insurance companies.
Together, Tom and Matt identified what they believed to be the most significant counterparty risk areas: affiliated and opaque reinsurance and excessive high risk (and illiquid) assets, as defined by the Federal Reserve and NAIC, in comparison to the insurance companies' reported surplus in their annual sworn statements.
Rating agencies give very little attention to the substance of reinsurance or the excessive buying of affiliated assets in comparison to the insurance company's surplus. Often, the ratio of high-risk assets to the total assets is considered. From a policyholder view, the more important consideration is high-risk assets compared to the financial cushion: the insurance company's stated surplus. Tom says, "Rating agencies have an asset rating heritage in their core DNA."
Regulators review admitted carriers' audit firm reporting. Examiners do desk analysis every three to five years in a face-to-face exam at the insurance company. This limits their review to the data presented by the auditing firm who was hired by the insurance company. Tom, a former regulator, says, "The NAIC permits audit firm reliance in the review process."
As a tax lawyer focused on estate planning, the emphasis has to be on the carrier keeping their promise. Too often advisors recommend product(s) solely on the pricing they’ve received through their broker. Our firm policy is simple: if the TSR Ratio™ is over 400 percent, we will not permit the product into the trust without the client and advisor signing an excessive counterparty risk waiver.
Zach Hesselbaum, J.D., LL.M. (Taxation), Chicago, Illinois
Stock companies have created a massive life insurance lapse crisis in older Americans. Our firm specializes in helping these older clients and their families keep the money in the family. The TSR Ratio™ is a huge advancement in helping advisors NOT perpetuate this troubling and financially harmful trend.
Bob Larson, Settlement Masters and The Rushmore Group, Los Angeles, California
I cannot believe what I’ve learned from Tom Gober about the limitations imposed on regulators and how they rely on third-party audit reviews paid for by the carriers. It’s not fair to the regulators. The rating agencies have their focus on assets, not the opaque and affiliated reinsurance trend, which is troubling.
In my forty years at the top of the table, this is the most significant resource I have in choosing the carriers I present to my high-net-worth clients. I won’t write business with a company if their TSR is high, even if their rating is A+, now that I know what is missing in achieving that rating.
Rao Garuda, MDRT Top of the Table advisor, Cleveland, Ohio
As a CPA, I appreciate it when a tool creates clarity. Any CPA will immediately appreciate the approach identifying potentially problematic risk shifting, higher risk, less traditional, and lower liquidity assets relative to the company’s financial cushion—their surplus. I use the TSR when I know a client owns life insurance or an annuity to make sure the coverage promised is not in jeopardy because of unreasonably high counterparty risk.
Hubert McIntosh, CPA, Florida
I learned about the TSR Ratio™ from Kerry Pechter, and now I never miss a company review. I have every other Friday marked out so I am available—what can be more important than making sure the safe money products we offer our clients are truly safe?
Terri Collymore, More Advisory Group, Minnesota
If the companies you need to know about are not there, simply request their addition, and in fourteen days, their TSR Ratio™ report will be included.
identifying the higher-risk assets and opaque nontraditional reinsurance as a ratio to the reported surplus. REMEMBER: All data comes from the insurance companies’ annual sworn statements. This is a mathematically determined ratio devoid of opinion.
so subscribers can quickly contrast the difference between two very different companies—from more traditional to less traditional but more financially engineered insurance companies.
introducing new companies in our TSR Ratio™ spotlight and reviewing the best way to explain the TSR Ratio™ to your clients and prospects.
and attention is given to make sure each TSR Ratio™ subscriber is well versed in:
A new carrier is put under the spotlight for an even more intense review by Tom Gober every other Friday at 1:00 p.m. ET. These sessions help you understand at a deeper, more committed level the absolute importance of selecting and trusting the right counterparties with your clients’ hard-earned money.
Here are the answers to those we are most frequently asked:
Take a look for yourself at a recent article discussing the license revocation of insolvent reinsurer, Alpha Re. Opaque reinsurance is an enormous problem. You need to be aware of this as markets continue to rise, inflation continues to present higher, less liquid assets, and risk-shifting financial engineering presents a real and immediate issue.
This is equivalent to what frequent customers of Starbucks spend on lattes, muffins, and coffee each year. It’ll renew annually unless you request otherwise.
We offer a 100 percent refund if you are not satisfied. To qualify, you need to have joined and remained on the entire TSR Ratio™ Zoom meeting immediately after your purchase. If you are not completely satisfied after that Zoom meeting, all you need to do is contact Lesli.
Email: lesli@smartadvisornetwork.com
Direct Cell: (814) 624-9767 — Yes, this is her real and direct cell number!
Do you want a fast and effective way to assess your clients’ annuity and life insurance company counterparty risk?
Join us for the next TSR Ratio™ call with Forensic Accountant Tom Gober
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