Shenandoah Life Sales Suspended

[Crabcake Johnny]

If I was healthy and had a 1 million in coverage with a carrier that was in receivership I'd expect a call from my agent.

If I didn't get that call and I qualified to be underwritten by another carrier and I lost a portion of my money I might go after the agent legally.

In fact, if I lost money and knew the agent had information that might have caused me to protect myself yet didn't give me that information for fear of a chargeback or loss of renewal commissions I'd definitely sue.

My agent's job is to inform me of pertinent events and I'll make the decision on how I want to proceed.

 

[Mark]

nolhga.com :: Law Summaries

Be careful how you talk about this subject and info.

Advertising Prohibition
§ 38.2-1715 "Prohibition against advertising guaranty funds" No person, including an insurer, agent, or affiliate of an insurer shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement which uses the existence of the Association of this Commonwealth for the purpose of sales, solicitation, or inducement to purchase any form of insurance covered by this chapter

 

[Joe Moore]

nolhga.com :: Law Summaries

Be careful how you talk about this subject and info.

Advertising Prohibition
§ 38.2-1715 "Prohibition against advertising guaranty funds" No person, including an insurer, agent, or affiliate of an insurer shall make, publish, disseminate, circulate, or place before the public, or cause, directly or indirectly, to be made, published, disseminated, circulated or placed before the public, in any newspaper, magazine or other publication, or in the form of a notice, circular, pamphlet, letter or poster, or over any radio station or television station, or in any other way, any advertisement, announcement or statement which uses the existence of the Association of this Commonwealth for the purpose of sales, solicitation, or inducement to purchase any form of insurance covered by this chapter

Mark,

I thought about this before I posted this on here. This is not "advertising for sales, solicitation, or inducement to purchase".

 

[Mark]

True, but when I called the Ins Dept and ask them about how this fund works, they told me not to bring it up to anyone. It is something that should not be talked about. You would have thought I was asking them some top secret info.

I don't think you are doing anything wrong, but know there is a line somewhere that you can't cross. I'm not sure where the line really is, but just use caution when talking about the reserves.

 

[Russ]

What did the article in Roanoke Times say yesterday.....

"Its fortunes appear to be waning as the new policy moratorium enters its sixth week on Monday. Other insurers are moving to snap up Shenandoah Life's clients. Agents say they have no choice but to accommodate those customers who choose to switch.

"There's nothing magic about what Shenandoah had," said Dennie Denison of the Denison Insurance Agency in Roanoke".................


What is an agent to do if he or she has several clients with $1 million dollar policies? Tell them if Shenandoah Life is liquidated their one-million dollar policy is now guaranteed for $300,000? How many would stay with you? I wouldn't.

In that same article Joe Moore linked, former CEO Robert Clark said..."Whatever happens, the company must be solid enough to satisfy the rating agency. Without a high rating "the business goes away pretty quickly."

I've stated before on this thread, if I could change my policy, I would. I've told people I've talked to that...yes, Shenandoah will pay your claims. My question is the time it takes to pay. That's the reason I would change. My family can't afford to wait months for my death proceeds.

The booklet the SCC sent doesn't really explain what happened. Talked to a Shenandoah policyholder this afternoon that said she read most of it, but still didn't understand it. I told her where they lost their money(Fannie and Freddie and Sigma Finance). If that is wrong, I hope someone tells me.

 

[Joe Moore]

True, but when I called the Ins Dept and ask them about how this fund works, they told me not to bring it up to anyone. It is something that should not be talked about. You would have thought I was asking them some top secret info.

I don't think you are doing anything wrong, but know there is a line somewhere that you can't cross. I'm not sure where the line really is, but just use caution when talking about the reserves.

I talked to the TN Department of Insurance about the same subject 2-3 years ago. I was comparing this to advertising FDIC Ins for banks. My thought was why not be able to let the public know. Their answer was, "you can't use this to sell, but you can let the client know it is there, and exists".
Huh??

I am with you, I don't know (and neither does anyone else I have ever talked with) where the real line is.

Check any of the policies, and they all have the page notifying the client of the existence of this Guaranty Association. I wish it was more clear to what degree agents could inform clients of it's existence.
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Talked to a Shenandoah policyholder this afternoon that said she read most of it, but still didn't understand it. I told her where they lost their money(Fannie and Freddie and Sigma Finance). If that is wrong, I hope someone tells me.

I think this is the only thing that a client understands, and they should be told. I am telling them that Shenandoah lost around $61.5 million, and they were worth around $200 million in surplus. It would be like an individual losing about 1/3 of their net worth within a short period of time.

The legal mumbo-jumbo in the booklet does nothing but confuse them.

 

[Russ]

Another article on Shenandoah Life and other companies in trouble...Worry Grows Over Insurers As Ratings Slip - WSJ.com

 

[Joe Moore]

Another article on Shenandoah Life and other companies in trouble...Worry Grows Over Insurers As Ratings Slip - WSJ.com

It makes you wonder if AIG will soon be the only company left, and how much money our government will pour in to try to keep it afloat. I heard this morning on TV, AIG sent over half their first TARP money to foreign banks. What????

This is what they get for writing almost a blank check, and not demanding accountability for where the money goes.

I have seen very little about Standard Life of Indiana suffering from the same faith in Fannie Mae and Freddie Mac fate, but they also seem to be victims of almost the same situation:

Indy.com | Post: State takes reins of Standard Life | Indianapolis, Indiana

Seems all AIG has to do is sneeze, and the government asks "how sick are you this time?", and not even worrying about smaller companies.

I am beginning to wonder how stupid we really are.

Maybe it is time to send 535 rookies to Washington to try to fix this damn mess. The ones there now have proven beyond a doubt that they don't have a clue.

 

[Mark]

Another article on Shenandoah Life and other companies in trouble...Worry Grows Over Insurers As Ratings Slip - WSJ.com

I think that some clients will be calling their agents after reading this story.

 

[Russ]

From Joe Moore's post yesterday....

"We have been told some group agents have already been terminated "For Cause" for rolling business."......

What are the agents suppose to do? You know there are agents with other companies that know these groups have Shenandoah and would go in and replace the business. "E" rated company...no Fitch rating. If the Shenandoah agent didn't replace it, the competitors would. Shenandoah is up wolf-creek pass without a paddle. Maybe they come out of it, but I can't imagine most will leave their annuities with a company that was in a state of not allowing customers access to their money.

If they found a buyer, they should survive. Still wonder why OneAmerica backed out. Maybe they looked at the blocks of business and realized the "Golden Promise" block wasn't worth it.

From the link I provided...."The company has about 200,000 individual and group life-insurance policies and 21,000 annuity contracts in force in more than 30 states, mostly in the South." My family had 7 of them. Thirty-thousand families nationwide with 7 policies would make up the entire amount Shenandoah has? Can you say small. I thought they were bigger.

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I think that some clients will be calling their agents after reading this story.

Ditto your thoughts...I didn't realize it was in the Wall Street Journal...ugh...............
- - - - - - - - - - - - - - - - - -
From the WSJ article....."The company is continuing to pay death and annuity benefits as well as health-insurance claims.".........

But their not paying interest on annuities..

"Question 30: WILL I CONTINUE RECEIVING SYSTEMATIC PERIODIC
WITHDRAWALS AND INTEREST PAYMENTS FROM MY
SHENANDOAH LIFE ANNUITY?
Answer: No, not at this time. Although these payments have previously
been in place, they are considered withdrawals from your
annuity. Because withdrawals from annuities are being
suspended at this time, these systematic payments will not be
processed until further notice."
- - - - - - - - - - - - - - - - - -

It makes you wonder if AIG will soon be the only company left, and how much money our government will pour in to try to keep it afloat. I heard this morning on TV, AIG sent over half their first TARP money to foreign banks. What????

This is what they get for writing almost a blank check, and not demanding accountability for where the money goes.

I have seen very little about Standard Life of Indiana suffering from the same faith in Fannie Mae and Freddie Mac fate, but they also seem to be victims of almost the same situation:

Indy.com | Post: State takes reins of Standard Life | Indianapolis, Indiana

Seems all AIG has to do is sneeze, and the government asks "how sick are you this time?", and not even worrying about smaller companies.

I am beginning to wonder how stupid we really are.

Maybe it is time to send 535 rookies to Washington to try to fix this damn mess. The ones there now have proven beyond a doubt that they don't have a clue.

I went on the Standard Life website. The questionnaire does a much better job explaining what happened with that company...http://www.standardlifeofindiana.com/Form Storage/FAQ012109.pdf

Also, policyholders are allowed to receive interest off of their annuities, unlike Shenandoah's case.