So can you please explain to me how over 200,000+ policies were sold for them?
Colorado Bankers (CB Life)...
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- 11,011
Greed. Ignorance. Complacency. By all parties involved.
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A 2 min google search would have informed both consumer and agent that a B+ rating is dangerously low and means a high risk of default.
Even A- is low and carries a much higher amount of risk.
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Some agents dont care. Some dont know.
Many sold it because it was the highest rate available at the time. Willfully blind perhaps. Figured 3 years or 5 years is such a short time "what could go wrong".
But the agents and their firms are not all to blame.
Consumers bought this product because it paid a 50% higher interest rate than what AAA rated annuity carriers paid at that time. 200+% more than CDs at the time.
There was plenty of willful blindness, lack of questions, lack of confirming info given; by the consumers impacted.
Everything a financial advisor tells you, can be fact checked. In fact, the advisor should be able to provide sources for you to fact check.
Your advisor tells you a B+ rating is a strong rating? Ask them where you can verify that info at. If they "cant tell you" that is a huge red flag.
I can give you a 3rd party reference link to literally almost any fact I tell you as an Advisor. Especially something as cut and dry as financial ratings.
Blind trust is how you lose a lifetime of hard work.
Trust but verify, is how you stay safe.
For those who bought through bank channels.... thinking a bank has your best interest at heart.... or the best and brightest advisors on staff.... thats your first mistake. That is where advisors who cant make it on their own go to get a salary so they dont starve out of the business. And the bank only cares about making more money, in larger amounts. Thats why they pushed the easiest to sell product (highest rate) that could capture the most assets the quickest.... BECAUES THEY DONT CARE ABOUT YOU.
If they cared about you, they would have educated you on why not to get the 3% annuity and opt for the 2.5% annuity with the A+ rated carrier instead.... especially considering the fact that CDs paid 0.5% at the time.
Ive consulted for banks insurance departments on behalf of carriers. They only care about the commission, upper management could care less what the product is, they care about the largest commission.
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Dont get me wrong, I feel its the Agents moral duty to explain ratings and how riskier annuities pay higher rates, and safer annuities pay lower rates.
Its most certainly their legal duty to not hold out the SGA as "insurance" or a catch all for selling sh*tty annuity carriers.
It is also their legal duty to explain ratings truthfully if asked.
And I feel its a moral duty to show a AA or AAA rated option along with a lower rated option and explain the risk involved with both. (when I say lower rated, I do not mean a B rating)
That obviously did not happen in many cases in this situation. And it is a tragic situation for many consumers involved in this mess.
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Again you put in over the insured limits . Anytime with any product when a company is paying 1-2% above most of the other carriers it means there desperate for deposits . That said with fdic insurance that's not any issue . With annuity's its an issue .
- 11,011
Its not an issue, so far, with FDIC insurance.
FDIC reserves would not cover 20% of all insured deposits if there was systemic failure.
In that moment, Id rather have my money with a AAA rated carrier who has survived the past 150 years and has a better financial rating than the federal government.
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Correct but i assure you just like Silicon Valley bank the govt will print unlimited to make all whole . The integrity of the whole system is at stake
- 19,835
Tough choice
An insurance company or the government
Who do you trust, or distrust, more?
- 11,011
A Mutual Dividend Paying Life Insurer over the government any day of the week.
Not all insurers are the same.
I've seen the large mutuals do things to make situations right, even when not legally obligated to, many times. Stuff that a publicly traded carrier would have never done.... or a private equity owned carrier never would have done. Not saying they are perfect. But they are owned by the policy holders, and operated for the benefit of the policy holders. A publicly traded carrier is owned by investment funds, and operated for the benefit of those investment funds. There is a clear cut difference, and impact, to the policy holders when large sums of money (and trust) are involved.
The "company you keep around you" matters a lot in life, in many different ways.
Stephen Round
Expert
- 34
So far on this forum only three or four of Lindberg's victims have reported that they have received their money. I'm in Connecticut and have not received anything. The portal shows me what my wife and I have coming, but no indication of when the check will be cut and mailed. Have any Connecticut victims been paid yet? How about other states???
Phyllis, if you are still on this thread, can you tell us if the partial payment you received last year was deducted from the total you received fron the state guaranty association, or did the SGA deduct that amount from what they said they owed you?
My understanding is that last year's partial payment has no effect on what the SGA pays us. The SGA will pay us their maximum on the balance that's owed us now. ?
My understanding is that last year's partial payment has no effect on what the SGA pays us. The SGA will pay us their maximum on the balance that's owed us now. ?
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