Mutual Benefit's Slide Isn't Ex Ceo Kates's Fault
In the otherwise accurate article "Panicky policyholders have insurers trembling" (Finance, July 29), on the problems facing the life-insurance industry, BUSINESS WEEK does Mutual Benefit Life Insurance's former chief executive, Henry Kates, an enormous disservice.
By not listing the chronology of Kates's employment at Mutual Benefit, the article implies that he was the individual responsible for Mutual Benefit's heavy reliance on real estate investments, and indeed, that he also supervised the company's rapid expansion into "GICs and other retirement products."
In fact, Hank Kates became the CEO of Mutual Benefit long after these strategic decisions had been made by his predecessor and the company's former chief investment officer.
It is to Kates's credit that he addressed the problems in Mutual Benefit's real estate portfolio as they developed, and his leadership displayed both a shrewd understanding of the threat facing Mutual Benefit and the courage to tell the truth about it to both the rating agencies and the various regulators involved.
John P. Mascotte
Chairman & Chief Executive Officer