THE SWISS INSURANCE INDUSTRY
          
               Insurance companies belong to one of the most
          important sectors of the economy in Switzerland.  It is
          also extremely conservative and safe.  In 130 years
          none have failed, a record that even Swiss banks cannot
          match.  Unique tax advantages combined with
          conservative money management cause Swiss insurance
          products to perform much better than one might expect.  
          Conservative does not have to mean low returns.  (If
          the insurance company doesn't have to deduct losses on
          a lot of bad investments, it is much easier to maintain
          a conservative, safe, high return.)
               Swiss government insurance company regulation
          keeps investment portfolios at a nearly no risk level. 
          Liquidity and valuation of investments are ultra-
          conservative.  Only a maximum of 30% of investible
          funds may be put in real estate.  Swiss real estate has
          always held the highest values, but this is ultra-
          conservatism at work.  If it should go down, it might
          not be liquid enough to cover claims -- so let's be
          ultra-conservative and severely limit the exposure.  A
          philosophy that a lot of American banks and insurance
          companies are probably now wishing they had followed --
          or at least their policyholders are wishing they had.
               Then just in case this isn't enough, Swiss
          insurance companies often carry their real estate
          holdings at less than half their present market value,
          allowing a very wide margin of price changes before
          safety can possibly be affected.  
               Swiss accounting in general seems to be on the
          conservative side.  Companies tend to have hidden
          reserves of millions, rather than the North American
          style of overvaluing assets to achieve a high stock
          market price for takeover bids.  This conservatism
          applies all the more to the insurance industry.
               The Swiss insurance companies offer a greater
          range of services than the American investor is used
          to.  In fact, the range is broader than that offered by
          most Swiss banks.  There are only about 20 insurance
          companies in Switzerland.  This concentration makes the
          industry stronger, and easier to supervise, than the
          thousands of American insurance companies.  There are
          no weak insurance companies in Switzerland, unlike the
          United States where insurance laws in many states
          permit an insurance company to be formed with capital
          as low as $100,000, and licensed, empty insurance
          company shells are frequently sold in classified ads in
          The Wall Street Journal and other newspapers.
               The industry is regulated by the Swiss Federal
          Bureau of Private Insurance -- a very strict regulator. 
          There is no rate competition -- the emphasis is on
          maintaining the strength of the insurer, and
          prohibiting risky investments (although it is unlikely
          that a Swiss insurance manager would even think of
          making a risky investment).
               Regulation of private insurance companies has been
          established by a clause in the Swiss federal
          constitution since 1885.  Contrast this to the United
          States where insurance companies are often regulated
          only by rules promulgated by a politically appointed
          insurance commissioner, who expects to be employed by
          an insurance company when the governor who appointed
          him is retired in a few years.