by John Darer CLU ChFC MSSC RSP
An answer to the question “What happens if my insurance company goes belly up?” continues to play out in the New York Supreme Court Nassau County.
After 20 years in “assisted living”, is Executive Life of New York moving into the next stage of its life? If so, what does that mean for structured settlement annuitants and trusts receiving payments from Executive Life of New York structured settlements set up prior to April 1991?
On December 17, 2010 New York State Supreme Court Judge John M Galasso has ordered the Superintendent of Insurance of the State of New York, in his capacity as Rehabilitator, to present the Court with a proposed order and plan of liquidation for Executive Life Insurance Company of New York (ELNY) on or before July 1, 2011 which establishes a briefing schedule and provides for notice to all ELNY creditors, after the Superintendent confers with the Life Insurance Company Guaranty Corporation of New York and other interested parties.
The “Order to Show Cause” ordered that:
- If the New York Insurance Superintendent, as ELNY’s Rehabilitator, is unable to present a proposed plan to the Court on or before July 1, 2011, then the Superintendent must submit papers in support of an application for an order of liquidation on or before August 1, 2011 and must provide notice of papers, plus a copy of the December 17, 2010 Order, to the Guaranty Corporation and all persons as directed by the Court;
- Any answering papers must be filed and served upon the Superintendent by November 11, 2011, and any reply papers must be filed and served by the Superintendent by December 16, 2011;
- The Guaranty Corporation and other parties wishing to be heard must appear before the Court on January 4, 2012, at 9:30 a.m. to show cause why the Court should not grant an order of liquidation for ELNY;
- OF IMPORTANCE TO EXECUTIVE LIFE INSURANCE COMPANY OF NEW YORK STRUCTURED SETTLEMENT ANNUITANTS AND THEIR FAMILIES the Order of Rehabilitation for ELNY entered on April 23, 1991 and the December 16, 1992 Order approving the Plan of Rehabilitation for ELNY continue in force and effect, including the provisions providing for payments to structured settlement and other annuitants (emphasis added); and
- The Superintendent must serve a copy of the Order to Show Cause upon the Guaranty Corporation within five days following the signing of the December 17, 2010 Order.
ELNY has been in rehabilitation since 1991.
Despite its troubles, a rising tide of interest rates could ease the pressure which has compounded due to reinvestment options that are quite different than those assumed when contacts were placed 20 years ago and prior.
In future posts and a video podcast on LBN I will continue to discuss ELNY and how the life insurance industry has changed since 1991, following the ELIC and ELNY crises.
Executive Life of New York Resources
- Copy of the Order to Show Cause dated December 17, 2010 Download ELNYShowCauseOrderDec172010
- Resource Page Executive Life of New York: What’s Going On?
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