Shenandoah Life Sales Suspended

[policy doctor]

A-a-a-a-h-h-h- yes, the agent is always put in the middle.

DOI doesn't want you to mention that state guaranty fund because, in all probability, it's a phantom fund. Meaning, very little is in it (like FDIC). And why is there no full disclosure on its' assets....thought they were public funds!

The agent is really a selling broker for the company, not the client. His fiduciary responsibility is to the insurer. Ever read those contracts you sign?
Remember this?.....
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One of my companies is in receivership also..Penn Treaty.

 

[Russ]

Just had a Shenandoah policyholder call wanting to change banks her 2 policies are drafted from. Asked her if she had received the booklet...she said no. Told her of the situation....she said to cancel...that they would look at other companies....I told her I thought Shenandoah would pay her claims, but if she wanted another company, I can still help her.

Just had another company I write for(Lafayette Life), issue a 20 year, $100,000 term policy at the super-preferred rates after a paramed exam(not a Shenandoah replacement). I quoted the standard NT rates. That's 2 policies I've had issued within the last week that qualified for the preferred rates. I never had that happen with Shenandoah.

 

[djs]

The agent is really a selling broker for the company, not the client. His fiduciary responsibility is to the insurer. Ever read those contracts you sign?

Yes. And in that same contract is usually some wording about properly servicing clients, making sure you act in an ethical manner, etc.

The agent gets caught in the middle of this everytime. You have an obligation to do what is best for the company, but you also have an obligation to act on the clients behalf. I look at it this way, if I had to read the story in the newspaper, which will sound better:

- Agent keeps client with broke insurance company to protect his commission
or
- Agent loses commission but protects his client

The irony is, the top one is the contract thing, the bottom one protects my license.

No right or wrong answer. Just an interesting dilemna for agents. (okay, there are a lot of wrong answers, no completely right answers).

Dan

 

[policy doctor]

Like walking on hot coals!

If you think about it, every profession is fraught with liability issues except Politician. Seems like they can just slough it off.

 

[Mark]

What happens when a company can not pay all of the death claim? Who do you think the client will sue or do about it?

I believe they will also come after the agent.

I think the agents are going to get caught in the middle no matter what.

 

[Crabcake Johnny]

To post this again - if something happened where I lose all or a portion of my money or found I had limited access while my agent knew all along but chose not to inform me I think I have a good case.

 

[SportsNut]

To post this again - if something happened where I lose all or a portion of my money or found I had limited access while my agent knew all along but chose not to inform me I think I have a good case.

I wonder what that agents E&O ins would say about that issue...? I do not think that E&O is designed for such an event to cover insolvency of an ins carrier... and who is to say that it is the marketing agents job to alert a policy holder of when to cut and run... in fact doing so could bring much more liability to an agent, as opposed to doing nothing, IMO.

The insurance company knew long ago that they were in some deep trouble. It is a matter of who knew and when did they know. The fact is, if anyone wronged a policy holder it was the corp officers who had inside knowledge... sue them, you would have far better grounds, IMO... again.

Furthermore, I just looked at a couple of states limits on their ins guarantee fund, and they both limit death benefit claims to 300K, max. So why would any company be allowed to accept more than the guaranty fund would back...? Maybe an agent should not place more face amount of db of any one client, with any one insurer... Try explaining to the client who wants 1 mil in coverage that "John, you are going to need to take 4 paramed exams..." Crazy.

One can go buggy over trying to CYA...

 

[Joe Moore]

The insurance company knew long ago that they were in some deep trouble. It is a matter of who knew and when did they know. The fact is, if anyone wronged a policy holder it was the corp officers who had inside knowledge... sue them, you would have far better grounds, IMO... again.

In Shen's situation, this is simply not true. With the loss of the $50 million, or so with Fannie & Freddie, Shen was downgraded from A-, to B++, by AM Best.

When One America agreed to "merge", it was with this knowledge. They pulled out of the merger around February 10th. The state came in February 12, 2009.

Some of the most surprised people in the insurance world were the officials of the company.

 

[SportsNut]

In Shen's situation, this is simply not true. With the loss of the $50 million, or so with Fannie & Freddie, Shen was downgraded from A-, to B++, by AM Best.

When One America agreed to "merge", it was with this knowledge. They pulled out of the merger around February 10th. The state came in February 12, 2009.

Some of the most surprised people in the insurance world were the officials of the company.

Joe:

With all due respect, what you should have written was... that Shen's mgmt is "some of the dumbest people in the ins biz".

Why... you ask. Anyone that would have approved that such a high percentage of their investment assets would have been invested into one security... let alone a company that was under such pressure and out of favor industry...

Here is the chart for the stock over the past year.... At what point should they have said "when"...? Maybe somewhere around June or July 08 would have been nice... or at least take another position to offset these losses that looked ominous to anyone with half an investment brain. I simply cannot cut them the slack that you are willing to... sorry, and I didn't lose a nickel in the company. But it is senseless; period.

 

[policy doctor]

Well the house of cards is starting to cave in on many different companies. Aviva just announced suspension of new annuities sales. Nacolah not taking new agent contracts. Equitrust downgraded. Olde Mutual shut down their Atl office unannounced. Others cutting commissions. etc, etc, etc.