Spalding Council #427

STATEMENT ON FINANCIAL SERVICES OF MARKETS AND THE KNIGHTS OF COLUMBUS from Supreme Knight Carl A. Anderson

     The upheaval in the financial markets in recent days has caused a great deal of concern virtually everywhere among financial services, professionals, regulators and consumers alike. Every major financial institution has been affected by the turmoil because of the complexity of our economy, and we are no exception.
     But I can report to you that there is no reason to be concerned about the value of your Knights of Columbus annuity or life insurance. Because of the very conservative approach we take to investing our $14 billion in assets, the impact on the K of C has been far smaller than for many other organizations and the industry as a whole. By avoiding investments in the complex and speculative vehicles that are at the root of today's problems, we greatly reduced the impact of the crisis on our operations. Instead, we have consistently relied upon high quality investments. Nevertheless, some of them have suffered losses. Yet the wisdom of that approach has been proven sound.
    What Standard & Poors said of us in 2008 when they reaffirmed our AAA rating for the 16th consecutive year remains true today. Our "liquidity" is viewed as extremely strong, reflecting an asset portfolio that consists primarily of high-quality investment grade bonds." S&P also stated that our "investment portfolio has very strong credit quality" and our capital adequacy is "among the strongest in the industry." This is the case today. Our capitalization is, and remains, "extremely strong."
    Our surplus stood at more than $1.7 billion on June 30 of this year, and it continues to provide an unusually large cushion of protection against turmoil of the sort we have seen in recent weeks.
    While a final determination of the impact of the continuing financial crisis on our year-end financial statements cannot be calculated until sometime in January 2009, we are confident that our surplus will remain extremely strong and that our surplus ratio will continue to remain in excess of historic industry levels.
    One crucial area continues to set us completely apart from those firms that have incurred enormous debt. We have NO DEBT on our balance sheet. Our strong cash flows make it unnecessary for us to borrow funds at all.
    As a result, our financial condition remains extremely strong, and you can be certain that you are fully protected by one of the strongest and most reliable insurance programs in the world.