The New York State Insurance Department has posted a News Release on its website announcing the proposed liquidation plan for Executive Life Insurance Company of New York (ELNY) and providing additional information to supplement the petition for liquidation filed September 1, 2011 by New York Insurance Superintendent James Wrynn.
In the announcement, Benjamin M. Lawsky, Superintendent of New York's Department of Financial Services, states "Executive Life does not have enough assets to meet all its obligations, a fact made far worse by the recent financial crisis. Protecting the people who depend on payments from the company was challenging, but working with the guaranty associations and the life insurance industry, we have devised a plan that will maximize payments and ensure the fairest possible outcome for everyone."
According to the News Release:
- ELNY's proposed restructuring plan will double ELNY's assets and "should fully protect approximately 84 percent of those who currently benefit from [ELNY's] payments."
- The exact impact of the ELNY restructuring plan on each payee will not be known until at least mid-October after the guaranty funds finalize the amount of their contributions.
- The anticipated ELNY restructuring plan will include:
- "ELNY's remaining assets of approximately $900 million.
- "An estimated $730 million in contributions from state life insurance guaranty associations.
- "Approximately $40 million from life insurance companies for enhanced benefits for contract owners, payees and beneficiaries who are not covered by any state guaranty association to provide coverage up to $100,000.
- "Approximately $25 million from life insurance companies for a further 'top-up' benefit to increase the coverage up to $250,000 for beneficiaries who are not covered by any state guaranty association, or whose maximum state guaranty association coverage is below $250,000."
The News Release also provides a special call center number for ELNY contract owners and beneficiaries.
In a separate, but related, announcement on its website, the National Organization of Life and Health Guaranty Associations (NOLHGA) has posted a revised schedule for its September 7-9, 2011 Members' Participation Council (MPC) meeting in Reston, Virginia. The MPC holds quarterly meetings to discuss the latest developments in NOLHGA-related insolvencies and the insolvency arena. The revised September 8, 2011 MPC meeting agenda allocates more than six hours for a closed session and working lunch to discuss ELNY.
For S2KM's complete reporting and analysis of the ELNY liquidation, including an Executive Life timeline, see the structured settlement wiki.
Addendum (September 8, 2011): Industry insiders point out that the New York Insurance Department ELNY News Release is not totally consistent with the proposed ELNY Restructuring Agreement included with the New York Insurance Superintendent's September 1, 2011 ELNY Petition for Liquidation. Readers should also note: 1) the newly proposed ELNY restructuring plan has not yet been finalized or approved; and 2) the prior ELNY "Agreement in Principle" announced in 2007 never materialized.
Addendum 2 (September 8, 2011): The New York Liquidation Bureau (NYLB) has now posted on its website the ELNY proposed "Restructuring Plan", "Order to Show Cause" and "Supporting Motion Papers".