The last annual report of the New York Superintendent of Insurance for the year 2010 was 235 pages long. The first annual report by the newly created Department of Financial Services for 2011 was just 118 pages and covered both the banking and insurance departments. The 2012 annual report, released on June 15, 2013, was just 71 pages long. The Superintendent’s report for 2012 included just 1 page for the New York Liquidation Bureau, which was responsible for the management of 64 insurance company rehabilitations and insolvencies. In this age of transparency this reduction in reporting is disappointing. Peter Bickford’s May 20, 2013 Insight column in the Insurance Advocate expands upon the need for detailed reporting for the benefit of the New York legislature and the public.
Edward Stone is quoted in this article by Gail Liberman and Alan Lavine that appeared in the Wall Street Journal’s Market Watch on May 17, 2103. ” The article points out that benefit payouts on annuities are guaranteed by state insurance guaranty associations where the coverage limits vary by state from a low of $100,000 to a high of $500,000 and that settling a claim when an insurance company fails can take many years. Edward Stone suggests choosing your annuity extra carefully and “cross out insurance companies that have significant exposure to wholly owned captive insurance companies”.
An NBC reporter for a Miami affiliate, Willard Shepard, did an in-depth interview with two Executive Life (ELNY) annuitants, or shortfall payees that aired in South Florida on May 15th. The investigative interview can be viewed online along with the companion article. The interview highlights the many issues facing those annuitants whose benefits will be cut later this year. Through no fault of their own, 1500 annuitants will see their benefits cut by as much as 66% some time later this year. As pointed out by one of the annuitants “I trusted the system and the system failed me.”
LifeHealthPro has reported that the Executive Life (ELNY) liquidation is expected to be implemented in the third quarter of this year, and could be as early as August. The article did not specify an effective date for the payment reductions, so those annuitants expecting cuts are still in the dark. The looming cuts will cause severe hardship for many of the 1500 who will not receive the benefits that they thought were “guaranteed” under their structured settlements. While a hardship fund has been established, it has just $100 million to cover over $920 million in lost benefits.
Despite our best efforts, the New York Court of Appeals denied our motion for leave to appeal the Appellate Division decision and will not hear our case on the merits. We expect that the Restructuring Plan will be signed shortly and benefit reductions will start soon after that. As difficult as it may be to accept, anyone who has received a notice from the NYLB that their benefits are slated for cuts should prepare for benefit reductions to begin soon. If you are an Executive Life Insurance Company of New York (ELNY) annuitant and you have received a notice that your payments are to be cut and you have not yet had your ELNY structured settlement documents reviewed, please contact us at (203) 504-8425 or via email at firstname.lastname@example.org.
2013 Annual NASP Conference
Eddie Stone will be speaking at the 2013 Annual NASP Conference being held in Las Vegas from November 5-8, 2013. Conference registration began on April 15, 2013. More information on the conference is available here.
A federal court in Dallas, Texas has certified a class action on behalf of Verizon pension beneficiaries, permitting 41,000 retirees to sue as a group over the transfer of their pension benefits to Prudential Insurance Company of America.
Edward Stone testified at a public hearing in support of HB 6148 before the Connecticut Labor and Public Employees Committee . The proposed legislation seeks protections for retirees in pension de-risking transactions.
The February 18, 2013 edition of the Insurance Advocate, an insurance industry publication serving New York, New Jersey, Connecticut, Pennsylvania and Washington, D.C. ran a column by Peter Bickford entitled “Ongoing ELNY Debacle Exposes Serious Problems”, with a Guest Opinion “ELNY Decision Unjust to Victims” by Edward S. Stone, Esq. In his Foreward to that edition, Steve Acunto, editor and publisher of the Insurance Advocate stated: “While Peter Bickford and Ed Stone each lay this [ELNY debacle] at the doorstep of Superintendent Lawsky, it is not placed there as a personal attack on the Superintendent, particularly in these very pages where we have had so many good things to say about his performance, notably during Super Storm Sandy. The matter is inevitably placed in his path as the office holder. Stone refers to other Superintendents who have had a piece of this problem during their tenures. Unfortunately, it appears that the matter has been kicked down the road to this latest point. We believe that redress of some sort is due and that an appropriate response might come with the restructuring of that department so that accountability is ensured appropriately.”
Verizon Retirees Sue to Block Pension-Risk Transfer – Verizon’s transfer of its pension obligations to 41,000 retirees to Prudential stripped the retirees of the protections afforded them under ERISA and the Pension Benefit Guaranty Corporation (PBGC).