- 4,920
The policy contract will have guaranteed annuitization contractual rights. So, I am guessing you will be able to annuitize as part of the process, but not while it is still in the courts.
Colorado Bankers (CB Life)...
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The policy contract will have guaranteed annuitization contractual rights. So, I am guessing you will be able to annuitize as part of the process, but not while it is still in the courts.
QuestionsCBLife
New Member
- 6
I've heard both approaches and still not sure.
One version was that the state guaranty fund pays out first so policyowners don't have to wait for the lengthy liquidation process to finish. And that later when liquidation finished it's possible that excess policyholders receive more above the state limit. But I agree, how could state guaranty fund know how much to pay out to each policyowner if liquidation not done yet?
Conversely other version is liquidation proceeds first, determines what's left for policyowners and gets paid out, then and only then can state guaranty fund step in and pay excess policyholders the difference up to their state maximum
Hopefully, regardless of which step comes first, there are two elements of potential reimbursement to a policyowner:
state guaranty fund maximum of state of residence when liquidation order officially granted
+
leftover co. assets after liquidation allocated proportionately to policyowners
Do "we" think it's combination of the two? Regardless of sequence?
QuestionsCBLife
New Member
- 6
That's interesting, thank you. I wasn't aware of that.
- 17,053
The rules vary state to state. And they are pretty vague rules that don’t get into specifics in most states.
Phyllis Christos
Expert
- 49
My husband and I have a 5 year fixed rate fixed term annuity with CBL that is "due" up in March 2023....
Eight weeks from now!
Initial deposit was 400 grand.
We were supposed to collect about 70 grand in interest over the 5 year period...
Then be able to withdraw the funds...
We are in Boston MASS.
Our local Citizens Bank guy suggested it when our Citizens CD matured with Citizens...5 years ago.
CD rates were lousy at the time and he explained this would be a perfect alternative with zero risk.
We asked if it was insured by FDIC like our CD...and he said no it's insured by the Mass Guaranty Association.
He told us as long as both our names were on the policy -- that we would be covered by the Mass State Guaranty Association for up to 500 grand.
("Each person on the policy is insured for 250 grand")
That was a complete lie.
And we didn't do extensive homework.
We trusted the Citizens Bank Rep.
We filed a formal complaint with Citizens but they are taking zero responsibility for their employees' actions.
The guy is still working for Citizens Bank in Brighton Mass!
Absolutely Disgusting...
Anyways -- we are hoping to get 250 grand from the Mass State Guaranty Association sometime in calendar year 2023. Fingers crossed!
Hoping the liquidation order will be enforced and no more appeals will be allowed....
The remaining/over limit excess amount of 200 grand is probably never going to materialize for us.....maybe sometime down the road....??
But we've sort of given up any hope of that.
We are retired!
Eight weeks from now!
Initial deposit was 400 grand.
We were supposed to collect about 70 grand in interest over the 5 year period...
Then be able to withdraw the funds...
We are in Boston MASS.
Our local Citizens Bank guy suggested it when our Citizens CD matured with Citizens...5 years ago.
CD rates were lousy at the time and he explained this would be a perfect alternative with zero risk.
We asked if it was insured by FDIC like our CD...and he said no it's insured by the Mass Guaranty Association.
He told us as long as both our names were on the policy -- that we would be covered by the Mass State Guaranty Association for up to 500 grand.
("Each person on the policy is insured for 250 grand")
That was a complete lie.
And we didn't do extensive homework.
We trusted the Citizens Bank Rep.
We filed a formal complaint with Citizens but they are taking zero responsibility for their employees' actions.
The guy is still working for Citizens Bank in Brighton Mass!
Absolutely Disgusting...
Anyways -- we are hoping to get 250 grand from the Mass State Guaranty Association sometime in calendar year 2023. Fingers crossed!
Hoping the liquidation order will be enforced and no more appeals will be allowed....
The remaining/over limit excess amount of 200 grand is probably never going to materialize for us.....maybe sometime down the road....??
But we've sort of given up any hope of that.
We are retired!
- 17,053
I think your guess is way wrong. Once it is into other insurance companies bailing out a failing one any attractive options will be gone.
- 17,053
If you can prove that he told you that a state guarantee fund worked anything like FDIC insurance you can file a claim against the agent that sold it to you. He has E&O insurance and he had to NOT do that in all his training.
Not to mention that jointly owned deferred annuities only offer one layer of protection, not two. The advisor could have written them each separately and they'd be fully covered (assuming 200k in each).
- 4,920
Those are not attractive options. They are guaranteed contract privileges. So, unless all policies are voided, the contract privileges would seem to have to be honored, especially if policies are assigned to a carrier to service after receiving Assessment money from Guaranty Association
For instance, state of NJ guaranty fund only guarantees up to $100k annuity fund value(deferred stage), but up to $500k of Annuity benefits (ie payout annuitization). What I don't know is if the $500k only applies to policies already in payout.
- 17,053
Have you had experience with any guarantee fund settlements? They sort of make up rules as they go along from what I have seen. Nothing is clearly written in stone. The only thing that is guaranteed is that no one is happy in the end.
The only one I’ve seen close up was a funeral PreNeed company. All policies were small whole life policies with increasing death benefits. The increasing death benefit on those policies works similar to dividends in that they are not guaranteed but they do get an increase every year and once you have it each year it can’t go away. It’s part of your policy.
The problem in this case was that the family that owned the insurance company had pulled a total Bernie Maddoff and had embezzled all the money and was cooking the books for 15 years and the house of cards blew up. After several years of the Insurance Commissioners sorting out what they had obviously let happen right under their eyes they finally came up with, There is just SO much money owed and so few assets to cover it that it would put too large of a strain on the State Guarantees so they were only going to pay dollar for dollar what the person had paid in premiums on the single pays and just the base face amount on the multi pays and all the growth in the policies was lost. Which on some of those policies that reduced their death benefit by half.
You just don’t know how they are going to settle things until it’s all done.
