Insurance Companies

My last couple of posts haven't made a lot of sense . I have outlined this one so maybe my thinking is clearer.

Both of my sons think I understand a lot more than I do. I try very hard to keep up with my educated sons. Having worked for 15 years in the education field I understand that degrees do not necessarily mean intelligence. I have worked very hard at self education, reading hubbies required reading in his college classes. Reading the set of encyclopedics we had at home, studying various fields I worked in.

I have been trying to make some sense of the financial mess the world is in today and I am really struggling. Number one son has a lot of information on his blog that is sometimes very difficult for me to understand. Number two son doesn't spend a lot of time trying to figure it out. Maybe I have too much time on my hands is why I am trying to understand it. So here I go at my understanding.

1954 father-in-law (less than a high school education), he reads everything that is printed that he can get his hands on. Prediction corporations (what or who?) will take over the world. It was such of silly idea that we didn't find out why or how he came to that conclusion. I wish now, I had paid more attention.

1961 Homeowners policies new product for insurance companies. I was working for a Savings and Loan and they wanted to persuade all their mortgage holders to change fire policies for homeowners. This began my years of working in the insurance field first fire and casualty and ending up in life insurance in 2000.

Here is some of the things I learned about insurance. Insurance was started to provide coverage for ships and their cargo. Lloyd of London, had a group of men who would underwrite or pledge so much money to cover the ship and cargo that it would arrive at the port intended for the goods. If the ship and cargo was lost they would pay what amount of money they had pledge to the ship owner. If the ship an cargo arrived they had a profit from the premium they had charge for pledging there money. Groups of men pooled money to set up insurance companies to cover not only ships and cargo's but fire insurance, and other types of insurances. Insurance companies were then founded. Laws were enacted to protect public to ensure that they had a big enough pool of funds to pay claims in case of a catastrophe. That money had to be invested to keep the company a float. Claim pools had to be invested very secure investments. Premiums had to be large enough to pay expenses of insurance company and add to the claims pool. Then you understood the law of large numbers that keep that pool of money at a safe level.

Somewhere along about the late 60's or early 70's I became aware that corporations were buying up big insurance companies. Why? Or course they discovered that large claims pool that by law insurance companies were required to keep. If the corporation owned the insurance company it was a small matter to get the laws changed to get there hands on all that money.

2009 Government is having to loan money to insurance companies to keep there doors open?
Corporation (who?) got there hands on the claims monies. Now they were no longer required to keep such a large claims pool, so what were premiums used for (?) obscene salaries and bonus's.

Why working for 48 years off and on in the insurance field did I only make enough money to pay a mortgage and feed a family. Something is wrong with this picture or is something wrong with my thinking?