by John Darer
Thursday is the Ides of March and with it comes the Executive Life of New York Liquidation hearings at the New York State Supreme Court Nassau County in Mineola . This seems to be lost on a structured settlement industry colleague whose continued posting of the following false information is in considerably bad taste under the circumstances.
Here's what the settlement planner states:
"Q: Historically, have any other annuity companies failed and left customers with nothing?
A: Not in the settlement industry. Executive Life was the only carrier writing settlement annuities (back in the late 80's and early 90's) that went into receivership. When they went into receivership the courts treated settlement recipients at a higher level since their money with Executive Life was "Settlement" money, not a traditional investment. The courts instructed Executive and the assignment companies to pay 100% on the dollar for the remainder of all policies. It was unfortunate that we had to experience that event (the Executive collapse) but it did show that the safety systems in place had the support of the court(s) and allowed settlement recipients to be made whole without interruption."
S2KM reported on November 27, 2011 that with respect to Executive Life of New York:
- For the 1459 Schedule 1.15 SSAs with anticipated shortfalls:
- 156 SSAs are estimated to have been factored. Note: reliable industry sources have informed S2KM the actual number of current ELNY SSAs previously factored is considerably higher.
- 1100 SSAs have "uncovered amounts" in excess of $100,000 each on a present value (PV) basis including
- 237 SSAs which have "uncovered amounts" in excess of $1,000,000 PV each including
- 17 SSAs which have "uncovered amounts" in excess of $5,000,000 PV each.
- The largest ELNY SSA has an "uncovered amount" of $25,692,377 PV.
- According to Schedule 1.15, the total percentage of each ELNY SSA contract value "protected" by ELNY's remaining assets, state guaranty fund payments plus additional enhancements varies from 34 percent to 100 percent depending upon the individual contract.
Comments
While it might be correct to say historically annuity companies have failed and none have left customers with nothing, it's leaving out something material (i.e. see immediately above)
The NSSTA has a considerable current and historical document repository available to its members.
The structured settlement planner is a member of NSSTA. According to a January 8, 2007 NSSTA memo about Executive LIfe Insurance Company (ELIC) "a small number of structured settlement annuitants, estimated to be no more than 300, suffered shortfalls in their subsequent payments because their annuities were too large for guaranty funds to make much of a difference, or the original tortfeasor in their case had, itself, become insolvent. According the California Department of Insurance (CDI), the average policyholder suffered an eight percent (8%) shortfall in payments as a result of ELIC’s insolvency."
There is no point in naming the structured settlement planner who has already displayed a generous amount of apathy when it comes to correcting information on his website. Nobody likes to be told to "clean up their room", but at least an apology is warranted to those ELNY victims (facing benefit reductions that could be over 50% )for the settlement planner's indifference.
Leave a Reply