Colorado Bankers (CB Life)...

[Newby]

I honestly never understood why banks began pushing annuities. It made little sense to me because they usually took an asset they had on deposit like a CD where they were lending the deposited money out at a higher interest than they were crediting. IE. lending at 5% & crediting 3% on deposit for an annual spread of 2%. By selling an insurance companies annuity, they were sending the asset elsewhere for a 1 time commission as the bank was merely the insurance agent on the annuity & the bank employee a sub agent that got many times little or none of that 1 time commission. If a CD stays on deposit for say 10 years for many customers, that is 20% the bank could have made on the spread of crediting & maybe they received 2,3 or 4% 1 time to sell the annuity.

The oddest part is the corner bank employee many times pressuring people to buy the annuity didn’t get paid on the annuity sale, but needed so many points on a monthly or quarterly grid to hit their salary benchmarks for # of various transactions. So, a comp grid incentivized the employee to push money to leave the bank & go to the insurance carrier.

Just never understood that

Because they were losing CD sales to insurance agents selling annuities which always paid higher interest than CDs. They were losing market share.

 

[scagnt83]

Because they were losing CD sales to insurance agents selling annuities which always paid higher interest than CDs. They were losing market share.

Very true. They at least could have used A+ rated carriers though to replace something as safe as a bank deposit.

 

[Debbie Griffiths]

Most of us are getting nothing.

I would have to believe you were not the 1st or last customers of the bank that this rep or other reps sold annuities with. I don't know how, but it would be great if you could discover other customers who were also told about the Guaranty association as the rep likely errored in their understanding of the Guaranty Association & confused some aspects of FDIC. If other customers that were told this when they bought an annuity from any company the bank was licensed to sell, maybe those customers could attest to the fact they were told the same.

Ironically, bank sales reps don't generally earn much or even any of the commission the insurance carrier may pay to the bank. That is just how many of the bank insurance sales work as most of their pay is salary, etc. My guess is the rep honestly thought they were putting you in a better place because the interest was better than your CD. The error was not in the sake or even the carrier so much at the time, but the overstatement of how the Guaranty Assoc worked & the limits.

The next pain point will be when all the other heathy insurance carriers are sent a bill for their share to pay for the problems of CBL that they had nothing to do with.

 

[Debbie Griffiths]

I would be interested in knowing whether or not those of us potentially losing funds from the Colorado Bankers Life will be able to write off any of the losses? After all it is FRAUD?

 

[Allen Trent]

I would be interested in knowing whether or not those of us potentially losing funds from the Colorado Bankers Life will be able to write off any of the losses? After all it is FRAUD?

Ask your CPA, but a deduction for "Losses on Deposit" when a financial institution becomes insolvent are miscellaneous deductions subject to 2% of your income. So, first, you would have to have actual losses you don't get back after the process is done. It would have to be a loss of your deposit, not your interest you hoped to receive as you have never been taxed on your interest. Lastly, only the losses over 2% of your income would able to be itemized & you would have to be itemizing your deductions, not taking the standard deduction (a very low percentage of tax payers itemize in recent years because the standard deduction is larger than it had been in the past).

Definitely worth asking your tax person, but possibly will still be awhile before you know if you get back less than you deposited.

 

[Debbie Griffiths]

Ask your CPA, but a deduction for "Losses on Deposit" when a financial institution becomes insolvent are miscellaneous deductions subject to 2% of your income. So, first, you would have to have actual losses you don't get back after the process is done. If would have to be a loss of your deposit, not your interest as you have never been taxed on your interest & lastly, only the losses over 2% of your income would able to be itemized. Lastly, you would have to be itemizing your deductions, not taking the standard deduction.

Definitely worth asking your tax person, but possibly will still be awhile before you know if you get back less than on deposit.

Thank you Allen for this important information. I am also wondering how many folks in the northeast GA area have been affected? Of course I would love to hear from anyone facing this issue. I suppose it’s true: Misery loves company!

 

[Steve R]

Hello everyone. I'm new to this forum. So, I have an annuity with Colorado Bankers Life. It was for 3 years which expired in August, 2021. For 3 years, I was receiving monthly payments of 3% (approximately $250.00 per month). Because of the rehabilitation, I was advised that at the end of the three years, the payments would only be 1% (approximately $84.00 per month). Of course, I'm not happy, but $84.00 is better than $-0-. I received the 1% at the end of August, 2021 and at the end of September, 2021, however, at the end of October, 2021, I received nothing. In a few days I'll learn if I'm also going to get anything for November. Is there anyone else out there who is not getting even the minimum 1% that was promised while this rehabilitation drags on? I called CB Life a week ago and they acknowledged that I should have received the minimum 1% payment direct deposited into my bank account. They were going to look into it and get back to me. It's been a week and I'm still waiting. If anyone can shed any light on this, it would be greatly appreciated. I have called 3 different numbers and simply cannot get through or reach anybody. Thanks in advance.

 

[Lauren Ohnesorge]

I'm a reporter writing about the situation with Colorado Bankers. I'm trying to find people this impacts who might be willing to speak on the record. Feel free to reach out to [email protected]. Thanks and so sorry you are all going through this. Have been speaking to a lot of people impacted by this situation in recent weeks.

 

[Debbie Griffiths]

Yes Colorado Bank has been in rehab since June 27, 2019… however I just learned of it in July 2021 when a new financial advisor we hired (fired other guy who sold us this bag of goods using 25% of our retirement funds) informed me. I nearly lost my breath. Fortunately, Lindberg is serving time in a federal penitentiary in Montgomery, Ala (7 years, 3 months - wasn’t even allowed out to attend his fathers funeral - good he deserves just what he is getting)… nonetheless my MYGA matures November 2023 & I am hoping I know more by then than I do right now. We too are up in age & simply don’t have 10-15 years to wait to get $ we planned on needing/using in 2023. I hope all of us policyholders will pull together to demand something be done. Greed on the part of the Lindberg guy or your local Financial Advisor should never be overlooked for the hardworking folks who trusted in their leadership. I simply won’t give up the fight for what is rightfully mine. Let’s stay connected folks.

 

[rats0001]

Lots of luck for 2023. Its been almost 3 years and virtually nothing has happened. Lots of court cases that take forever, then 6 months for a judge to decide, then an appeal that takes another year or so, then 6 months for that judge to come up with a decision, that usually remands back to the first court for a new trial. This goes on and on.
The thing is the NC insurance commissioner has said they should be liquidated, but still tries to rehabilitate them to save the other insurance companies don't have to pay.
Its funny I got an update today saying that Colorado is suing Acadamy(one of Lindberg companies) for 40 million, because Colorado "loaned" it to Acadamy, which then defaulted.
This should have happened 2 1/2 year ago.
I had some Executive Life($8 billion) annuities in the 1990's that were liquidated. It took 2 years to work out(which seemed like a long time), although I got the last payment in 2017.
At the pace Colorado is going, and the slowness of the courts, and appeals, I would think this its at least 10 years, not that I have any inside info.
Search for Pavonia Life another Lindberg company that went into rehab-but was not insolvent, at the Michigan Department of Insurance web site, and just look at the volume of court cases over the years.
The other thing is to read the quarterly reports by the NC commisioner, one is due any day now, and you can see how many entities Lindberg had used to put them into rehab.