Equitable Life Assurance Denies Bankruptcy Rumor

HARTFORD, Conn. — The president of the Equitable Life Assurance Society of the United States--the nation’s third-largest insurer-- categorically denied rumors that the firm was headed for bankruptcy court.

The rumors centered on the possibility that New York-based Equitable, which is owned by its policy holders, had missed a bond payment and was ready to seek protection from its creditors.

The reports of impending disaster at the country’s third-largest life insurance company hurt the dollar in foreign-currency trading in New York and prompted a brief flurry of trading in bonds as some investors appeared to be engaging in a classic “flight to quality” commonly seen in times of uncertainty.

“The Equitable is in solid financial condition, has strong cash flow from operations, is highly liquid and has approximately $62 billion in assets,” President Joseph Malone said. “The unfounded accusations are totally wrong, are without merit and do a grave disservice to the company and its customers.”

While industry analysts say the company has weak holdings in real estate and junk bonds, they don’t believe that a bankruptcy filing is in the cards.

“Bankruptcy of the Equitable won’t happen, although it is more thinly capitalized than its peers,” said William Cavanagh of Standard & Poor’s Insurance Rating Service.