New York State
James J. Wrynn Superintendent of Insurance 25 Beaver Street New York, N.Y. 10004
|ISSUED 09/02/2011||FOR IMMEDIATE RELEASE|
NEW YORK, NY (09/02/2011)(readMedia)-- Benjamin M. Lawsky, Superintendent of the Department of Financial Services, and James J. Wrynn, who serves as court-appointed Receiver of Executive Life Insurance Company of New York (ELNY), announced today the filing of legal papers to liquidate ELNY. The liquidation plan doubles Executive Life's assets, which should fully protect approximately 84 percent of those who currently benefit from Executive Life payments. In addition, the life insurance industry has voluntarily agreed to create an additional $100 million hardship fund to help those whose payments may potentially be reduced. Executive Life of New York was put into rehabilitation in 1991 when its parent company went under.
"Simply put, 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," Superintendent Lawsky said. "I want to thank the life insurance industry for voluntarily agreeing to create an additional hardship fund to make sure ELNY beneficiaries are treated fairly."
The overall plan consists of two components. The first is a Restructuring Agreement proposed to the Supreme Court in Nassau County that includes:
Additionally, as part of the overall plan but outside the Restructuring Agreement, there are:
Under the plan, all beneficiaries are protected up to a present value of at least $250,000. In states with a higher maximum such as New York, where the maximum is $500,000, they are protected up to the maximum in that state. Contracts with a present value below the maximum will have no reduction in future payments. Contracts with a present value above the maximum may have a reduction. Anyone who will potentially see a reduction in their annual payments can apply to the hardship fund created for that purpose.
Under the proposed Restructuring Agreement, a new not-for-profit special purpose insurance carrier will be created to assume responsibility for making payments to beneficiaries. Ultimately, it is anticipated that approximately 84% of beneficiaries will not have any changes to the payments they currently receive. The precise amounts of the reductions and the affected contracts will not be known until mid-October after state guaranty funds finalize the amount of their contributions. Thus, the exact impact on each payee will not be known until mid-October. At that time, letters will be sent to each beneficiary describing what their payments will be once the Restructuring Agreement is approved.Contract owners and beneficiaries who have questions can call a special call center at 1-888-398-8213. However, they should keep in mind that specific information about the exact amounts to be received by individuals will not be available until mid-October, so the call center will only be able to answer general questions until then.