In July 2013, the smart money was saying the company that runs the Caesars and Harrah’s casinos would go bankrupt, when a big investor, Apollo Global Management, offered a lifeline: It was willing to pump millions of dollars into the parent of the struggling casino company.
And where would Apollo get the money?
Not a problem. Apollo, which already had a big stake in Caesars, also had been building a life insurance division called Athene. That division was bursting with cash from the premiums paid by life insurance policyholders. “Athene Life Insurance and Annuity Company has tens of billions of dollars under management,” said Steve Pesner, a lawyer who took Apollo’s proposal to the Nevada Gaming Control Board for approval. It could spare some to help Caesars, in exchange for a promissory note and some nonvoting stock….
…The life insurance business is supposed to be dull — sell policies; collect premiums; salt the money away in the safest sorts of investments, mostly bonds; pay out benefits; and make money along the way by investing surplus assets prudently. No wild bets, no siphoning of assets, no off-the-books maneuvers.
This, at any rate, has been the idea since a crusading reformer named Elizur Wright set the standard 150 years ago and became America’s first state insurance regulator, in Massachusetts.
MARY WILLIAMS WALSH – NEW YORK TIMES – APRIL 11, 2015
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