Any update on the Bankers Life Rehab?

[Allen Trent]

Regarding interest: Check your Bankers policy. After the end of the "withdrawal period" (3yrs, 5yrs, etc.), your interest rate drops to 1.5% until you're 90 years old.
FDIC insured CD's are paying over 3% as I type...

Each product version will vary & also vary by state in regard to the lowest renewal rate after rate lock period. I am not familiar with bankers various products over the years, buy this is how most work. For instance some from 20 years ago had 2-3%, but products issued today may have a .5% to 1% minimum crediting rate

 

[DonP]

I haven’t read much on this thread . I know in the 1980’s big Annuity company Executive life went under . I’m pretty sure they all got their principle back over 3-5 yrs . Won’t these Colorado bankers clients under $300 k get all their principle back guaranteed by the state fund?

 

[scagnt83]

I haven’t read much on this thread . I know in the 1980’s big Annuity company Executive life went under . I’m pretty sure they all got their principle back over 3-5 yrs . Won’t these Colorado bankers clients under $300 k get all their principle back guaranteed by the state fund?

Not just principle but guaranteed interest as well.

 

[rats0001]

No state guarantee funds until insurance company goes into liquidation, maybe 20 years from now.
Policyholders have a contract with the insurance company , not the rehabilitator, or any policies purchased by another company, or the state guarantee funds. All policy values will be frozen as of 6/27/2019, and even these amounts will probably not be available immediately whenever the workout occurs.

 

[rats0001]

For those not old like me google Baldwin United.

 

[scagnt83]

No state guarantee funds until insurance company goes into liquidation, maybe 20 years from now.
Policyholders have a contract with the insurance company , not the rehabilitator, or any policies purchased by another company, or the state guarantee funds. All policy values will be frozen as of 6/27/2019, and even these amounts will probably not be available immediately whenever the workout occurs.

SGA protection is not just bailout money. They first use whatever capital they can from the insurer, then sell blocks of biz to other carriers if possible, then they look at liquidation.

Its not a fast process, but it will make policyholders whole eventually up to the SGA limits for their state.

 

[rats0001]

Over 3 years and basically nothing has happened, lots of court cases and appeals. NCDOI says maybe by 2029, that's 10 years total.
CBL has minimum 40% of affiliated investments that are probably worth 0. Every year death claims, IRA RMD's go in, not to mention the looting by all the lawyers, court cases, accounting fees, payments to global growth for who knows what, by 2029 there be nothing left. For some reason the rehabilitator can't get the quarterly reports out on time anymore, They are probably bored of the whole thing and are just phoning it in. Might have to hire some new accounting firms.
Now with lindberg out of jail and back running the companies, things will really slow down imo.

 

[caryl baff]

Upon further checking seems like Lindberg did not get out of prison yet, but watch.

 

[Newby]

Not just principle but guaranteed interest as well.

Not likely to get the interest. Maybe. Those things fly by the seat of their pants.
I know in the settlement of the case with the PreNeed insurance company out of St. Louis (there is an American Greed episode) the State Guarantee fund ended up only paying the principle that was paid in and only upon death. They did not pay the face amount of the policies or the interest that had accumulated even though those higher amounts were locked in each year and could not ever reduce they just said the money wasn’t there to pay all of that.

 

[scagnt83]

Not likely to get the interest. Maybe. Those things fly by the seat of their pants.
I know in the settlement of the case with the PreNeed insurance company out of St. Louis (there is an American Greed episode) the State Guarantee fund ended up only paying the principle that was paid in and only upon death. They did not pay the face amount of the policies or the interest that had accumulated even though those higher amounts were locked in each year and could not ever reduce they just said the money wasn’t there to pay all of that.

Preneed contracts do not fall under SGA jurisdiction. States, at least most states, maintain a loss reimbursement fund for pre-need contracts. It’s funded by a portion of the service fee from each contract sold. And it does not guarantee interest promised, only basis. And it’s limited by the amount of money that has accrued in the fund.

SGA protection covers any guarantees the contract makes, including any guaranteed interest rates.

And there is not a limited pot of money sitting there for the SGA protection. Any reimbursements are assessed from member companies, meaning other insurers.

Totally different regulations surrounding insolvency.