Insurance Companies and the Federal Home Loan Banks - A Growing Relationship


You have a vision for your financial future,
our partnership can play a key role to help
get you there.


 

Insurance Companies - advances - 2Q 2017

Insurance Companies - dividends - 2Q 2017

Insurance companies play a key role within the U.S. housing market. The Federal Home Loan Bank of New York (FHLBNY) promotes housing and economic development by providing low-cost, flexible liquidity to member financial institutions. This closely aligns with our insurance company members’ significant investments and participation in the mortgage market along with their economic development initiatives. Our insurance company members count on us to be a reliable and stable source of liquidity in any market condition. 

Membership and advances by insurance companies have increased exponentially as more and more realize the integral role the FHLBNY plays to insurers looking to converge liquidity and working capital needs (as shown in the chart to the right). Overall, the Federal Home Loan Bank System (FHLBanks) has close to 400 insurance company members, while the percentage of all FHLBanks borrowings by insurance companies has quadrupled between 2007 and 2016.

Insurance companies typically capitalize on their membership to satisfy contingent and strategic funding needs, in addition to financing capital, acquisition costs, and new facilities. This enables them to manage their liquidity positions and obtain affordable financing to support lending, investing, daily operations and grow their business in order to support the housing markets and the communities they serve.

Since the FHLBNY is structured as a cooperative, our members are shareholders. Over the last five years the FHLBNY paid an average dividend of 4.50% — the largest payout by an FHLBank over that time period. This high performance is a testament to our dedication to provide value to our members.

About the Federal Home Loan Banks


 

FHLBNY Insurance Company Members

› American Home Assurance Company
› Ameritas Life Insurance Corp. of NY
› AXA Equitable Life Insurance Company
› Genworth Life Insurance Co. of New York
› Horizon Healthcare Services, Inc.
› Kingstone Insurance Company
› Metropolitan Life Insurance Company
› MONY Life Insurance Company
› New York Life Insurance Company
› New Jersey Manufacturers Insurance Co.
› Selective Insurance Company of America
› Selective Insurance Company of New York
› Stratford Insurance Company
› Teachers Ins. & Annuity Assoc. of America
› The Prudential Insurance Co. of America
› The US Life Ins. Co. in the City of NY
› Transatlantic Reinsurance Company
› Tudor Insurance Company
› Western World Insurance Company
  • Whitepapers

    Understanding the Relationship Between Life Insurers and the FHLBanks Chicago Fed Letter Federal Reserve Bank of Chicago

    Read the article

  • U.S. Insurance Industry’s Exposure to the Federal Home Loan Banking System NAIC & The Center for Insurance Policy and Research Capital Markets Special Report

    › Read the article

Key Takeaways for Insurance Companies

Download our insurance company factsheet.

 

Benefits of Partnering with the FHLBNY

Flexible Funding Source

Membership at the FHLBNY affords insurance companies access to a wide range of liquidity tools through the use of our various credit products called “advances.”

Members can gain access to low-cost, wholesale funding for financial flexibility and backup liquidity to help meet unexpected cash flow needs and manage risk and profitability.

  • Meet liquidity and working capital needs
  • Augment income streams
  • Benefit from letters of credit and other products to enhance operating leverage

View our Credit Products

Key Benefits

  • Increase earnings through strategic liquidity management and quarterly dividends
  • Finance capital, acquisition costs, or new facilities without liquidating earning assets
  • Manage cash flow needs
  • Increase investment income by reducing cash and short-term liquidity balances and increasing invested asset balances
  • Fill liability maturity gaps and support match funding programs
  • Enhance operating leverage and liquidity with letters of credit as an alternative form of collateral
  • Access grant money for low-income housing or community development projects
  • Access discounted community investment funds
  • Demonstrate an enhanced liquidity position to regulators and rating agencies

How are Insurance Companies Taking Advantage of Membership?

Insurance companies have typically taken advantage of the low FHLBNY borrowing costs to fulfill a variety of needs:

  • Contingent and strategic liquidity
  • Match funding or pool funding
  • Asset and liability management

Gain access to tools that aid in your institution’s success. We also offer resources for beneficial insight and education.

Visit our Resource Center

Interested in Becoming a Member?

About Us: Strength in Numbers

The FHLBNY is a triple-A–rated, congressionally chartered, wholesale bank within the national Federal Home Loan Banks System.

  • As of June 30, 2017:
  • 325 member institutions including commercial banks, thrifts, credit unions, community development financial institutions, and insurance companies in New York, New Jersey, Puerto Rico and the U.S. Virgin Islands
  • $155.5 billion in assets
  • $117.9 billion dollars in advances

› About the FHLBNY

Membership Eligibility Requirements

  • Duly organized by law
  • Subject to inspection and regulation
  • Sound financial condition
  • Management is committed to ensuring sound and economical financial policies
  • Approved applicants must purchase membership stock as outlined in the membership application

Tools to Help you Determine Requirements

Eligibility Worksheet (HLB-009)

  • This worksheet will help calculate:
  • Eligibility
  • Initial FHLBNY Stock Subscription Amount
  • Financial Ratios & Real Estate Collateral Ratios

Apply for Membership

Applications may be submitted at any time.

 

Application Process Checklist
Forms & Agreements for New Members

Contact a dedicated Calling Officer that will help determine your insurance company's membership needs (212) 441-6700.


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