Right, unless the insurance company can hedge their bets. At it's simplest they could insure themselves with a re-insurance company.
They could also figure out financial consequences of social security going away and place long term bets on that. If they are able to hedge properly, they're basically reselling that hedge.
I... honestly am not qualified to say that this is what it is, but I would strongly suggest taking a look at the details of how we entered this recession. It sounds extremely familiar.
They could also figure out financial consequences of social security going away and place long term bets on that. If they are able to hedge properly, they're basically reselling that hedge.