The whole annuity business stinks

[shooter]

why would a plaintiffs attorney decide when an E&O policy comes into play or if it will provide coverage?

I would doubt an E&O carrier would provide legal defense to an agent in a case where the agent could not have known a CEO was committing fraud. I am not saying a plaintiff couldn't win a judgment in court or that an E&O carrier wouldn't settle a small case, just not sure why I would wait or get advice from a plaintiffs attorney of a disgruntled client

I just pointing out that when the law suit comes, his clients attorney
will be in contact with him the agent.
Sorry if that went over your head

 

[Bob L]

I sold a Colorado Bankers fixed annuity last year when I started selling annuities. It was the only one I sold. So what will likely be the net affect to folks with Colorado Bankers fixed annuities? Any guesses here? I was told by my upline, that everyone would likely be made whole, but they would not likely be able to recieve the full amt of their annuity during the rehab process. How long does this process usually take?

I sold one Colorado Bankers annuity in March of this year, having had them recommended to me by my IMO/FMO (whichever). Now I am having to calm down this poor fellow who's understandably worried about his money. It was already public information that CB had entered into two "consent orders for administrative supervision" with the North Carolina DOI, at the time I sold the annuity (see below).

I wish I had investigated the carrier before the sale. Won't make that mistake again. Live and learn.

"The petition says the Commissioner was concerned about the respondents' liquidity. On October 18, 2018, the Commissioner and the respondents entered into a consent order for administrative supervision for 120 days. On February 5, 2019, they entered into an amended consent order for administrative supervision for an additional 120 days. On April 4, 2019, they entered into a second amended consent order for administrative supervision, and agreed that appointment of a receiver was necessary for the protection of the respondents' policyholders."

 

[SParker]

Ten years later he finally received all his principal back, without any interest
payed on the contract.

Did it really take that long to recover the principal? I thought these products are guaranteed by the state up to a certain maximum, and the state would make the investor whole. That's not how it works?

 

[Tahoe Ray]

Did it really take that long to recover the principal? I thought these products are guaranteed by the state up to a certain maximum, and the state would make the investor whole. That's not how it works?

Sure...but that process can take years.

Work with companies that have been in business through a lot of bad economies and have high ratings.

That minimizes company risk.

This isn't just an annuity issue but an insurance company issue. Insolvency can affect anything from your term insurance to your max funded funded IUL and everything in between.

 

[Allen Trent]

Did it really take that long to recover the principal? I thought these products are guaranteed by the state up to a certain maximum, and the state would make the investor whole. That's not how it works?

Nope. The state Treasury doesn't guarantee any of the funds. Instead, carriers are members of the Guaranty Associations. In the event that an insolvent carrier was not bought or taken over by another carrier, the insolvent carrier would be liquidated. Once liquidated customers might be paid portions of what they were guaranteed in a contract. Any amounts they were still owed would be assessed to all the surviving carriers. As you can imagine, each of these steps & phases take years & each step has push back by those being unpaid as creditors & carriers assessed.

There is no pre-funded account waiting to pay such claims. It is funded at the very end.

This is my novice understanding of the process.