Business & Economy
Modern Woodmen of America reports another strong year in 2013 PDF Print E-mail
News Releases - Business & Economy
Written by Amber O’Brien   
Friday, 21 March 2014 15:18

2013 was a strong year financially and fraternally for Rock Island-based Modern Woodmen of America, according to recently released results for the year ending Dec. 31, 2013.

Life insurance in force grew by more than $1 billion for the third straight year. Assets surpassed the $13 billion mark, and surplus exceeded $1.5 billion, an increase of 13.7 percent.

“In addition to having a strong year financially, I’m proud of the fraternal contributions Modern Woodmen made to our members’ lives, their families and their local communities in 2013,” W. Kenny Massey, president of Modern Woodmen, said. “Through our fraternal benefits for members and fraternal programs that enrich members’ lives and communities, Modern Woodmen’s fraternal expenditures grew to $20.04 million.”

Continued growth in life insurance in force

Life insurance in force, the total amount of life insurance owned by members to protect their families in case of premature death, increased to $36 billion. This is the third year in a row in which life insurance in force has increase by more than $1 billion.

“Unfortunately, the fact is Americans today are underinsured,” said Massey. “It’s important for our financial representatives to help individuals and families acquire the life insurance coverage they need and protect their loved ones.”

 

Assets exceed $13 billion

 

Modern Woodmen’s assets increased 8.2 percent over 2012, reaching nearly $13.4 billion. Assets are primarily invested in high-quality, low-risk corporate and government bonds.

“Our first obligation is to be fiscally responsible,” said Massey. “We must protect the promises made to our members nationwide.”

Annuity assets under management equaled $7.6 billion.

Total life insurance and annuity certificate reserves, which are funds held to guarantee future benefits to members, increased 5.7 percent to nearly $10.5 billion. Compared to 2012, variable annuity certificate sales increased 52 percent, and variable annuity premiums increased by 79 percent.

 

Strong operational results

 

Total premium income was $1.05 billion in 2013.

Payments and benefits to members in 2013 increased 6.2 percent to $756.9 million. This includes death benefits, annuity payments and surrender benefits. An additional $14.1 million in dividend payments was refunded to life insurance and annuity certificates.

Net gain from operations after dividends was nearly $31 million with total net income surpassing $104 million, an increase of 10.7 percent in 2013.

 

Total surplus and special reserves surpassed $1.52 billion; an increase of 13.7 percent over 2012. Surplus and special reserves provide additional safety for members and ensure Modern Woodmen’s ability to meet unforeseen events, continue the organization’s fraternal programs and provide funds for future growth.

Modern Woodmen’s solvency ratio of 112.75 percent means that for every $100 of liabilities (promises made to members), Modern Woodmen has $112.75 of assets to back up those promises.

Fraternal programs support communities nationwide

 

Modern Woodmen has a nationwide membership of more than 770,000. Fraternal expenditures supporting Modern Woodmen’s family-oriented member benefits and programs grew to $20.04 million. These benefits and programs include disaster relief assistance, college scholarships, social and volunteer service programs by adult chapters and youth service clubs nationwide, and educational programs for schools and youth groups.

Key fraternal results included:

- More than 1.5 million people attended social, educational and volunteer events sponsored by Modern Woodmen chapters.

- 195,137 hours of volunteer service were recorded by youth service club members and 312,472 hours of volunteer service were reported by chapter and Summit chapter members.

- 1.7 million children were educated through free Modern Woodmen youth educational programs.

- $9.5 million was contributed through Modern Woodmen’s Matching Fund Program. The Matching Fund Program meets needs in member communities across the country. The fundraising projects, matched by Modern Woodmen, were conducted by the organization’s 2,162 adult chapters, 249 Summit chapters and 916 youth service clubs.

Modern Woodmen of America is a member-owned fraternal financial services organization. Since 1883, the organization has brought people together, supported families and strengthened communities nationwide. Modern Woodmen – touching lives, securing futures.

Securities offered through MWA Financial Services Inc., a wholly owned subsidiary of Modern Woodmen of America

 

 

 

 
A Business World Massacre – What Can Happen When Government Needs a Scapegoat PDF Print E-mail
News Releases - Business & Economy
Written by Ginny Grimsley   
Friday, 21 March 2014 15:04
By: Larry Katzen

It remains one of the greatest travesties in the history of American business: In 2001, the 85,000 employees of one of the world’s largest accounting firms began losing their jobs in droves. Their employer had become tainted by its loose association with Enron  Corp., a financial house of cards that was imploding and taking with it billions of dollars in employee pensions and shareholder investments.

In 2002, accounting firm Arthur Andersen was convicted of charges related to Enron’s fraudulent practices. The charges had nothing to do with the quality of their auditing – or any of Enron’s illicit practices. The conviction was appealed, and in 2005, the U.S. Supreme Court struck it down in a unanimous vote. But the damage had already been done.

To date, despite millions of records being subpoenaed, there is no evidence Arthur Andersen ever did anything wrong. Still, perceptions are everything: Most people are not aware that the accounting firm, which led the industry in establishing strict, high standards, became a government scapegoat.

When I speak to groups across the country, I ask the following questions. Below are the typical responses I receive – and the actual facts.

1. What do you remember about Arthur Andersen?

Typical Response: They were the ones that helped facilitate the Enron fraud. They deserved what they got.

Fact: Arthur Andersen was the largest and most prestigious firm in the country. It was considered the gold standard of the accounting profession by the business community.

2. For what was Arthur Andersen indicted?

Typical Response: They messed up the audit of Enron and signed off on false financial statements.

Fact: They were indicted for shredding documents. These documents were drafts and other items that do not support the final product. All accounting firms establish policies for routinely shredding such documents.

3. How long was it between the Enron blowup and when Arthur Andersen went out of business?

Typical Response: One to three years.

Fact: The largest accounting firm in the world was gone in 90 days.

4. Was the indictment upheld?

Typical Response: Yes, that is why they went out of business.

Fact: No. The Supreme Court overruled the lower court in a 9-0 decision, and came to the conclusion within weeks, making it one of their quickest decisions ever.

5. How many people lost their jobs as a result of the false accusations?

Typical Response: Have no idea, but the partners got what they deserved.

Fact: Eighty-five thousand people lost their jobs and only a few thousand were partners. Most were staff people and clericals who made modest sums of money.

6. Who benefited from Arthur Andersen going out of business?

Typical Response: Everyone – we finally got rid of those crooks and made a statement to the rest of business to operate ethically.

Facts: It was not the Arthur Andersen people; they lost their jobs. It was not the clients; they had to go through the stress and expense of finding a new auditing firm. It was not the business world in general: It now has fewer firms from which to choose and rates increased. It was their competitors who benefited– they got Andersen’s best people and clients and were able to increase their rates and profitability.

7. What accounting firms now have ex Arthur Andersen partners playing leadership roles in their firms?

Typical Response: None

Facts: The “big four,” all the large middle-tier firms and many small firms have former Arthur Andersen partners in leadership positions. Finally, many members of the new Public Accounting oversight Board (PCAOB), which oversees these firms, now have former Arthur Andersen people involved in reviewing the quality of these firms.

About Larry Katzen

Larry Katzen, author of “And You Thought Accountants were Boring – My Life Inside Arthur Andersen,” (www.LarryRKatzen.com), worked at Arthur Andersen from 1967 to 2002, quickly rising through the ranks to become a partner at age 30. His new memoir details the government’s unjust persecution of a company known for maintaining the highest standards.

 
New Mortgage Rules Protect Against Risky Loans PDF Print E-mail
News Releases - Business & Economy
Written by Jason Alderman   
Friday, 21 March 2014 08:53

Good news for people shopping for a mortgage – and for current homeowners facing foreclosure because they can no longer afford their home loan: New mortgage regulations drafted by the Consumer Financial Protection Bureau recently took effect and they provide a slew of new rights and protections for consumers.

One of the cornerstones of the new mortgage rules is that lenders now are required to evaluate whether borrowers can afford to repay a mortgage over the long term – that is, after the initial teaser rate has expired. Otherwise, the loan won't be considered what's now referred to as a "qualified mortgage."

Qualified mortgages are designed to help protect consumers from the kinds of risky loans that brought the housing market to its knees back in 2008. But obtaining that designation is also important to lenders because it will help protect them from lawsuits by borrowers who later prove unable to pay off their loans.

Under the new ability-to-pay rules, lenders now must assess – and document – multiple components of the borrower's financial state before offering a mortgage, including the borrower's income, savings and other assets, debt, employment status and credit history, as well as other anticipated mortgage-related costs.

Qualified mortgages must meet the following guidelines:

  • The term can't be longer than 30 years.
  • Interest-only, negative amortization and balloon-payment loans aren't allowed.
  • Loans over $100,000 can't have upfront points and fees that exceed 3 percent of the total loan amount.
  • If the loan has an adjustable interest rate, the lender must ensure that the borrower qualifies at the fully indexed rate (the highest rate to which it might climb), versus the initial teaser rate.
  • Generally, borrowers must have a total monthly debt-to-income ratio of 43 percent or less.
  • Loans that are eligible to be bought, guaranteed or insured by government agencies like Fannie Mae, Freddie Mac and the Federal Housing Administration are considered qualified mortgages until at least 2021, even if they don't meet all QM requirements.

Lenders may still issue mortgages that aren't qualified, provided they reasonably believe borrowers can repay – and have documentation to back up that assessment.

New, tougher regulations also apply to mortgage servicers – the companies responsible for collecting payments and managing customer service for the loan owners. For example, they now must:

  • Send borrowers clear monthly statements that show how payments are being credited, including a breakdown of payments by principal, interest, fees and escrow.
  • Fix mistakes and respond to borrower inquiries promptly.
  • Credit payments on the date received.
  • Provide early notice to borrowers with adjustable-rate mortgages when their rate is about to change.
  • Contact most borrowers by the time they are 36 days late with their payment.
  • Inform borrowers who fall behind on mortgage payments of all available alternatives to foreclosure (e.g., payment deferment or loan modification).

With limited exceptions, mortgage servicers now cannot: initiate foreclosures until borrowers are more than 120 days delinquent (allowing time to apply for a loan modification or other alternative); start foreclosure proceedings while also working with a homeowner who has already submitted a complete application for help; or hold a foreclosure sale until all other alternatives have been considered.

For more details on the new mortgage rules, visit www.consumerfinance.gov/mortgage.

Bottom line: You should never enter into a mortgage (or other loan) you can't understand or afford. But it's nice to know that stronger regulations are now in place to help prevent another housing meltdown.


Jason Alderman directs Visa's financial education programs. To participate in a free, online Financial Literacy and Education Summit on April 2, 2014, go to www.practicalmoneyskills.com/summit2014.

 
Governor Quinn Reappoints Doug Scott as Illinois Commerce Commission Chair PDF Print E-mail
News Releases - Business & Economy
Written by Dave Blanchette   
Thursday, 20 March 2014 08:14

Scott has Helped Illinois Become First in Nation in Renewable Energy, Saved Consumers Hundreds of Millions

CHICAGO – Governor Pat Quinn today announced that he has named Doug Scott to a second term as chairman of the Illinois Commerce Commission (ICC). First appointed in 2011, Scott has helped Illinois to become first in the nation in renewable energy and saved consumers hundreds of millions of dollars. Today’s announcement is a part of Governor Quinn’s commitment to protect consumers and ensure a clean and healthy environment for generations to come.

“Doug Scott has proven himself time and time again as a strong advocate for Illinois’ working families,” Governor Quinn said. “At the Illinois Commerce Commission, he will continue to fight for Illinois consumers by ensuring strong oversight of utility companies throughout our state.”

Prior to being appointed to the ICC, Scott protected Illinois’ consumers by working to significantly reduce emissions from the state’s power plants as director of the Illinois Environmental Protection Agency (IEPA). He also worked to support low-emission coal technology, wind power, and other alternative energy and fuel sources. Prior to leading the IEPA, Scott served as mayor of Rockford, and from 1995 to 2001 he served as state representative from Illinois’ 67th District.

Scott has a Bachelor of Arts from the University of Tulsa and a Juris Doctorate from Marquette University. As mayor of Rockford he held leadership positions in the Illinois Municipal League, United States Conference of Mayors and the national League of Cities. He also served as president of the Illinois Chapter of the National Brownfield Association.

Scott’s leadership at both IEPA and ICC impacted policies and initiatives that encouraged and expanded use of renewable energy throughout the state. A report recently released by the Environmental Law & Policy Center, Sierra Club, World Wildlife Fund, LEAN Energy US, the Illinois Solar Energy Association and George Washington University Solar Institute found Illinois leads the nation in the number of communities using renewable electricity.

During Scott’s tenure, the ICC has saved Illinois residents $680 million in proposed utility rate increases and in 2013 secured $109 million in consumer refunds from ComEd and Nicor Gas. In addition, it has assisted nearly 60,000 consumers save $4.6 million dollars that had been charged due to billing errors, late charges or deposit requirements. The ICC has also protected the environment by ensuring that the state’s renewable portfolio standards are adhered to by its major electric utilities as well as all active Alternative Retail Electric Suppliers.

The ICC's mission is to pursue an appropriate balance between the interest of consumers and existing and emerging service providers to ensure the provision of adequate, efficient, reliable, safe and cost-effective public utility services.

###

 
Scathing IG Report on DoJ's Mortgage Fraud Efforts PDF Print E-mail
News Releases - Business & Economy
Written by Grassley Press   
Wednesday, 19 March 2014 08:29

Thursday, March 13, 2014

Senator Chuck Grassley today made the following comment after the Inspector General for the Department of Justice released a scathing audit report on the Justice Department’s efforts to address mortgage fraud.

Grassley began asking questions about the Justice Department’s work in this area more than two years ago following a Senate Judiciary Committee hearing on lending discrimination cases.  Grassley initially asked the department on March 9, 2012, about its claim to have prosecuted thousands of mortgage fraud cases and to have “secured numerous convictions against CEOs, CFOs, board members, presidents and other executives of Wall Street firms and banks for financial crimes.”

Here is Grassley’s comment.

“The Inspector General’s report sheds light on what looks like an attempt by the Justice Department to pull the wool over the public's eyes with respect to its efforts to go after the wrongdoers involved in mortgage fraud.  According to the Inspector General, the department wasted time cooking the numbers about the cases it pursued, when it should have been prosecuting cases.  In addition, it isn’t even using the funding allocated by Congress for the specific purpose of going after mortgage fraud, which might explain why the Inspector General found that it isn’t a priority in some of the FBI’s biggest offices.  It's contrary to everything we've been hearing out of the Obama administration.  In order to change Wall Street's shady practices, the Justice Department needs to be honest and transparent about its efforts, and actually prosecute some people instead of succumbing to a too big to jail mentality."

 
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