The tax credit and affordable housing development industry is quite mature, and has utilized investments by insurance companies. Financial Intermediaries Outside of municipal bond purchases, the majority of the COIN sponsored investments have fallen into this category. Insurance companies appear to prefer investing in financial intermediaries over other investment mechanisms. Partially due to structuring and sizes of the transactions, insurance companies are unable to make or evaluate loans and investments in low-income urban and rural communities. However, there are exceptions.
Some companies are able to perform their own analysis and prefer to do so.
For others, the financial intermediaries perform a significant service. Consequently, the use of a financial intermediary is generally a more effective method of investment for the industry. Many insurers have developed relationships with community organizations and have made direct investments in affordable housing and economic development on their own. As the industry becomes more familiar with community investments, more companies may choose to make their own direct investments. Until that time, financial intermediaries represent the preferred means of investing in target products by most insurers.