Equitable Life Assurance Society's announcement of demutualization raised some long-debated questions about the merits of the stock company form. Industry executives maintain that access to capital is the major factor in the decision to demutualize. Capital needs, financial flexibility, and a blurring of sectors of the financial services industry are all reasons companies might consider demutualization, according to Moody's Investors Service's L. Antony Fisher. When the 1988 New York demutualization law first passed, it was thought that it would be more attractive to small and medium-sized mutual companies, but none stepped forward. Equitable will be the first company to test the appropriateness of the provisions of that law. According to Seyfarth, Shaw, Fairweather & Geraldson's Hal Barron, the benefits of demutualization include an increased ability to attract capable management by providing stock options and creating a more aggressive management attitude.
Full text: National Underwriter, Dec 24, 1990
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