Bankers Life Insurance Rehabilitation Questions

[David Nyman]

Hello All
I'm one of the stupid suckers that bought 2 - 5 year annuities with Bankers Life Insurance worth about 310 K. Its been paying me a monthly amount, same as before the rehabilitation. I'm trying to get a better feel how this is going to play out. As far as I'm concerned, they have allready defaulted on their contract with me. I was supposed to be able to withdraw 10% penalty free each year and the 310k after paying a penalty before the 5 years, then withdraw 100% after 5 years. They halted withdrawls with the rehab. When I bought these annuities I was assured that everything would be guaranteed by the Utah Life & Health Insurance Guaranty Association. I was told this was like the FDIC. NOT!!!! It seems that the rehab puts these insurance companies into limbo where they default on the annuity contract but can't be sued or forced into liquidation. Indefinitely!!! What a racket!! And nobody seems to be guarding the chickens. The NC insurance Commissioner was taking bribes from Lindburg to loosen the regulations even more so he could raid more. This annuity paid maybe .5% more than a CD. I don't think people understand the high risk that these insurance products have. The Insurance Agent set this up to not mature until 25 years later even though the intent was to take the money out after 5 years. The interest rate drops to 1% after the 5 yr guarentee period is over.
My question is: How long does this rehabilitation process generally take? When does the Insurance Guaranty Association step in and make people whole? It doesn't seem to be very effective. If this was a CD then FDIC would step in as soon as a bank defaulted.. Any information you can give would help out a very frustrated insurance customer.

 

[DHK]

First, I want you to know that I appreciate your frustration. I'm not sure if I can help ease that in any way, but I do want to help with parts of your post.

Its been paying me a monthly amount, same as before the rehabilitation. I'm trying to get a better feel how this is going to play out. As far as I'm concerned, they have allready defaulted on their contract with me. I was supposed to be able to withdraw 10% penalty free each year and the 310k after paying a penalty before the 5 years, then withdraw 100% after 5 years. They halted withdrawls with the rehab.

How can they be defaulting on your contract if you're already getting monthly income?

Add up the monthly amounts and compare them to your annual value. How much is it? Is it 10% of the annual value of the contract? Sounds like you are already receiving the 10% free withdraw every year?

Yes, after the surrender period, there would be no further charges and you can access the remaining contract values without a surrender charge.

The Insurance Agent set this up to not mature until 25 years later even though the intent was to take the money out after 5 years.

In every annuity contract is a year or age when the contract automatically 'annuitizes'. That's the maturity date. That date is NOT the same date as when you can access all the money in the contract after the surrender charge period.

My question is: How long does this rehabilitation process generally take? When does the Insurance Guaranty Association step in and make people whole? It doesn't seem to be very effective. If this was a CD then FDIC would step in as soon as a bank defaulted.. Any information you can give would help out a very frustrated insurance customer.

These are not deposit accounts held by an FDIC or NCUA institution. These are insurance contracts. These are also done on a state-by-state basis rather than the FEDERAL level of FDIC. (Ain't government grand? lol.)

Right now, as I'm sure you know, there is a criminal investigation going on in addition to taking the company into receivership - usually until another insurer takes over those contracts. However, in addition to reviewing conduct and criminal complaints, there needs to be more about the company's operations and the company's reserves to ensure that the company was set up and managing their promises and general investment account properly for the promises made. That's the difference between 100% legal reserve insurance companies... and fractional banking lending institutions.

It simply takes as long as it takes, particularly with the criminal investigations and whatever else doing on.

I hope this helped some.

 

[rats0001]

I have an annuity from Colorado Bankers Life. Each quarter they publish financial statements and update many of the legal matters the company is involved in. They include the same type of information for Bankers Life.
I don't read the Bankers Life section very closely, but it looks similar to the Colorado info.
As on 6/30/20 almost all of the Lindberg affiliated investments stopped paying interest. For Colorado its 700 out of 900 million that stopped. Colorado has sued many of these entities, and I follow the court filings, and not being a lawyer, the one thing I can say is the process is really slow. Many of the lawsuits include Colorado, Southland, and Bankers LIfe together.
If you didn't know Colorado has a 1 time take 10% of your contact out, up to $15000. I don't think Bankers has the same deal.
The state guaranty programs from what I read don't come into effect until the company goes into liquidation. Another kick in the pants is they can reduce your interest rate if they think its too high.
IMO this is going to take many years, unless a buyer is found, which is very unlikely since the assets are mostly worth 0. I also owned some Executive Life annuities that went belly up in 1991. In that case in was obvious they were going to go under so I got most of the $ out. Looking back I thought it took a very long time to go into liquidation, but upon seeing other cases, it was really fast, 2 years. Because of some lawsuits, I was getting checks from various settlements as late as 2017. I have seen some of these cases listed on the various guaranty web sites where the affairs are not finished for 20 years.
Its not surprising you didn't get much response to your question, this board is for agents of the same insurance companies, not many customers on here. Agents are not supposed to mention the guaranty associations according to what I read.

 

[DHK]

Most of his responses are in another thread in the Final Expense forum.

 

[caryl baff]

Yes, I too am another unhappy purchaser of Bankers Life annuity and have same issue. Matured after five years back in 2019 after put into rehabilitation thanks to a broker that had never checked into this ins co nor did he discover that it was put into rehab in June of 2019 5 months before my annuity came due nor did he care when I called him and asked what was going on. Therefore, would like to commence lawsuit to recover my retirement money however cannot find atty who will take case as they feel "not enogh funds involved". Very sad, first annuity is stolen from me second atty will not represent me in trying to recover said funds. If anyone knows of any class action suits would be grateful to learn of them. If anyone out there has info related to this issue would appreciate if you could let me know. This is not the world I have become used to the GREED is overwhelming and the scams are continuing and no one cares.

 

[Lusethreds]

Yep! A "Class Action Lawsuit" would be a good start, but needless to say, the "chickens" will continue to be scurrying in all directions. With Bankers being in rehabilitation, its simply another umbrella for the Big Bankers to hide under...forever! I have written to one of our TV stations and plan to do more. Would love to see Bankers in one of the series of "American Greed". Lindberg goes to trial in mid-April. He already has an extremely robust team of lawyers so I don't expect any headway. I would suggest everyone go online and review the quarterly updated documents from the North Carolina court system and follow it. You can see exceptional fees of $444,000 being paid for attorney fees. All the big boys are paying each other while the chickens scramble. I have also sent documents to the judge listed in the court case. It just makes me feel better. Being in Washington state, Bankers has to go into liquidation first before we can apply to the Annuity Guarantee program. Bankers found a hiding place right now and most likely won't climb out until we are all dead and buried. If someone can step up to the plate and set up a facebook page for "NC Chickens" we can perhaps embrace more thunder and at least have a voice. Good-luck to all! I know it hurts.

 

[David Nyman]

Yes, I agree it would be great to have a forum for the people that are being screwed by the fraudulent insurance companies. I have been looking but have not found anything. I think that people need to be made aware the the state insurance guarantee programs are mostly a sales tool and are completely inadequate.

 

[David Nyman]

From what I understand, when an insurance company goes into liquidation the state insurance guarantee program asks the insurance companies in that state to pay for the restitution. So the insurance companies do whatever is possible to avoid having an insurance company go into liquidation. Even though the company is in default with there contracts to customers. It’s like having a guarantee but the guarantee is worthless.

 

[Tahoe Ray]

I think that people need to be made aware the the state insurance guarantee programs are mostly a sales tool and are completely inadequate.

They may be inadequate but they are definitely not a sales tool. State guarantee programs are not even supposed to be mentioned/discussed in annuity solicitations/sales processes.

 

[David Nyman]

Key word here is “supposed”. In reality annuities are sold as a guaranteed product.