Colorado Bankers (CB Life)...

[Allen Trent]

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.

agree. Are you saying those pre-need consumers got less than what was guaranteed in the contract?

If you are talking about Lincoln Memorial & NPS, werent those policies taken over by solvent carriers who were then obligated to provide what was guaranteed in the policy, not the non-guaranteed.

All I am saying is that if this happens with Colorado Bankers, I am making the assumption that any carriers that take over the contracts will have to honor the base guarantees spelled out in the policy.

I wish it was more formal and/or that it wasnt an assessment of good carriers. Likely should be a similar setup to FDIC, but it will take tax dollars being collected on premiums to create such a program and that would also take decades to create adequate funding for the protection...similar to how PBGC works with insuring some base levels of Pension Fund obligations

 

[Newby]

agree. Are you saying those pre-need consumers got less than what was guaranteed in the contract?

If you are talking about Lincoln Memorial & NPS, werent those policies taken over by solvent carriers who were then obligated to provide what was guaranteed in the policy, not the non-guaranteed.

All I am saying is that if this happens with Colorado Bankers, I am making the assumption that any carriers that take over the contracts will have to honor the base guarantees spelled out in the policy.

I wish it was more formal and/or that it wasnt an assessment of good carriers. Likely should be a similar setup to FDIC, but it will take tax dollars being collected on premiums to create such a program and that would also take decades to create adequate funding for the protection...similar to how PBGC works with insuring some base levels of Pension Fund obligations

If you know anything about the state guarantee program, it was created as a reaction to prevent the government actually creating a program similar to FDIC insurance that would protect insurance consumers. Your plans to create that, and it would, of course, cause premiums to increase. The industry banded together, and put this together as a Band-Aid that they were self regulating to prevent the government actually stepping in. It help keep premiums lower. But it’s a mess in execution.

 

[rats0001]

This should delay Colorado Bankers Liquidation for at least a couple of years

New liquidation FAQ dated 1/30/23, saying Lindberg filed appeal of liquidation order on Jan 27, 2023.
Probably a year of discovery and delays, then 6 months for a decision, then appeal to NC Supreme Court,
Maybe sometime this decade this will be resolved.

 

[rats0001]

BIG BIG NEWS
Lindberg Federal Indictment

[EXTERNAL LINK] - United States v. Greg E. Lindberg

And interest withdrawal will be available, soon. But its not that big a deal because most contracts are near the end of the guarantee period, so the minimum rate on my annuity is 1%.

 

[David Nyman]

I wonder if this will put a stop to Lindberg's challenge to the liquidation? At 6-7% inflation I'm losing about 20k/yr. It's not like the NCIC hasn't known that Lindbergh was a crook a long time ago.

 

[rats0001]

I would hope so, but doubt it. Did some research on federal indictments today, and they supposedly have fast schedules as to when the trial is supposed to start. Yeah right!
The NC retrial that was on for 3/6, in now on for November. I hate the legal system.
My high rate ends 4/3, so I'll take the interest from Nov 1, 22 until 4/3, then the rate drops to 1%. Hardly worth it but I'll take whatever I can, since liquidation payout is many years away IMO.

 

[Allen Trent]

interest from Nov 1, 22 until 4/3, then the rate drops to 1%

Has it been determined that the rates after rate lock go to the actual lowest guaranteed minimum or merely that they could go to that level?

IE: what are other customers already last their rate lock maturity getting credited currently. Could very well be minimum considering their financial situation, but just curious if anyone actual knows for sure

 

[rats0001]

I think its kind of a mess because in liquidation, the contract rate is only guaranteed until the date the rehabilitation began 6/27/2019. Then they declare some low rate after that or use minimum contract rate to compute payout values.
The distribution letter said that interest withdrawals will be at the contract rate, which after the guarantee period for me is 1%.
For anybody who hasn't seen the letter you can go to

https://cblife.com/forms/Interest_Only_Election_Instructions.pdf

The third paragraph from the bottom talks about the interest rates.

 

[Stephen Round]

Finally, after 4 years, I've found a source of real information about the CBL debacle that my wife and I were enticed into by Citizens Bank of Rhode Island in 2018. It was for a "mere" $100,000 of our hard-earned retirement money, but has been a thorn in our sides since 2019 when we attempted to take out the funds (which we were assured we always had access to) to purchase our retirement home. My wife and I will be putting our heads together to tell our story over the next few days and will post later this week. I'm recovering from major surgery so I have a lot of time on my hands to put this together. The annuity was purchased through the Chepachet office of Citizens Bank with the assurance that we were "fully insured" against any possible loss.

Finally, some real information with no "run-around" !

 

[Stephen Round]

My wife and I were told by a Citizens Bank agent that our 100K investment was fully covered (principle and accumulating interest) by insurance similar to FDIC and has maintained that to this day. We found out there was something amiss back in 2019 when we tried to get back our principle (knowing we would have to pay a penalty) to help us purchase our retirement home. We were told it was a temporary glitch and would be sorted out "in a couple of months".

And here we are 4 years later...