Unbelievable as it may be, there are still Executive Life of New York annuitants who are going to be surprised when they are hit with the cuts which are expected to take place next month. Some annuitants believe they are going to receive a “lump sum” buyout from the newly created GABC. That is not the case. Some believe the hardship fund is going to step in and make them whole. To date, none of the annuitants have heard anything about hardship awards, and it is very clear that the $100 million in the hardship fund will not be able to cover all of the annuitants losses. The restructuring agreeement is expected to close on August 8, 2013 and the ELNY contracts will be transferred to the newly created District of Columbia captive insurance company, GABC. 1500 annuitants will receive up to 66% less than they are owed under their annuity contracts. For just the second time in the history of the life insurance industry, policyholders will not be made whole. For an industry that depends upon the trust and confidence of the policyholders, this will be a bad day. A real failure for the industry.
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