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A Crisis In Insurance, Benjamin Lipson

New England Journal of Public Policy

As the life and health insurance industry evaluates its long-term financial goals, the cloud of Black Monday — October 19, 1987, the day the stock market collapsed — blurs its cherished investment income projections. With investment portfolios under siege, mutual life insurance companies and stock companies alike are wary of making policy-pricing miscalculations that could prove to be disastrous. As if that weren't enough, one single disease — acquired immunodeficiency syndrome — looms as the most serious threat to life and health insurers for the remainder of this century. The spread of the new disease has caused insurers to adjust …