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Joe Moore
National Senior Benefits
Asurco Insurance Marketing www.finalexpenseagents.comwww.shenagents.com
PO Box 1954, Morristown, TN 37816
1-800-226-1004, 1-423-581-1004
From the article...." Statistics Show the Story
Several recent news stories have suggested that insurers, especially the life insurers, are the next group to implode"......
Which basically describes Shenandoah Life...a "life insurer". I've stated this earlier in this thread. I've written 95% of what I've written with Shenandoah in...life insurance. Healthy policyholders that are now not so healthy. Some may not be here much longer. I'll probably find out soon how good/fast they pay death claims.
I don't see why another company would take on blocks of Shenandoah, especially the life section. They do need a bailout.
I don't see why another company would take on blocks of Shenandoah, especially the life section. They do need a bailout.
The reason that a company or group of companies would take on Shen's obligations is to protect the integrity of the ins biz... If trust is lost in a small group of companies it can and will affect the trust and confidence in all ins cos. Notmuch different than if a handful of banks failed, and ppl lost money in them... how long would it be before folks are taking money out of perfectly good banks... that last phrase, perfectly good bank could be a new oxymoron, not sure).
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"A successful man is one who can lay a firm foundation with the bricks others have thrown at him." David Brinkley
The reason that a company or group of companies would take on Shen's obligations is to protect the integrity of the ins biz... If trust is lost in a small group of companies it can and will affect the trust and confidence in all ins cos. Notmuch different than if a handful of banks failed, and ppl lost money in them... how long would it be before folks are taking money out of perfectly good banks... that last phrase, perfectly good bank could be a new oxymoron, not sure).
That and the fact that active policies are a huge asset to any company. That goes double for a company buying older active life policies where the first years expenses of commissions and underwriting have been taken care of.
I can gaurantee you that there are already bids being taken on the books of Shen.
The reason that a company or group of companies would take on Shen's obligations is to protect the integrity of the ins biz... If trust is lost in a small group of companies it can and will affect the trust and confidence in all ins cos. Notmuch different than if a handful of banks failed, and ppl lost money in them... how long would it be before folks are taking money out of perfectly good banks... that last phrase, perfectly good bank could be a new oxymoron, not sure).
I think AIG has put a dent in the insurance industry. And AIG...breakingviews: Help Wanted at AIG financial products - Mar. 26, 2009. It was on shaky ground with some before all of this happened, within the last year. I have had a small portion of those I've talked to over the 25 years I've been doing this that don't trust insurance companies for whatever reason...lousy agent, company didn't pay what they "thought" they should have, etc. Now it's worse.
I've seen companies go under before...some come back, a few are liquidated. Shenandoah only had about 250,000 policies...now less. I think they need a bailout and probably deserve it. They've acted more professionally then AIG....they canceled the company trip....haven't read of any million-dollar bonuses given out.
Maybe some company or companies will take their business. We'll see.
Client has a traditional IRA in an annuity with Shenandoah Life
Client is required to take Required Minimum Distribution RMD or face a 50% tax penalty on any RMD amount not taken.
Shenandoah Life is not releasing any of the money for RMDs.
Will the client still be subject to the 50% tax penalty?
I believe he would but he can take it out of any other IRAs he has. He doesn't have to take it out of each one evenly. So the problem would only be there if he had ALL his IRA money in one company and if that's the case he had very bad advice or just made bad decisions on his own.
RMDs were waived for everyone this year so it's a non-issue.
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J Scott Burke
Funeral Preplanning
Life Insurance
Medicare Supplements
Long-Term Care Insurance
Annuities
Indiana, Kentucky, Tennessee www.newburyfinancial.com
The one Medicare Supplement I have replaced, I put on the Replacement Form Reason: "Client insisted on moving out of Shenandoah Life Medicare Supplement, due to receivership of Shenandoah Life".
Sometimes the agent is in a Catch 22 situation, and a C.Y.A. (Cover Your A**) is in order.
That's a great idea Joe. Do you think you may want to add something saying the action was client initiated and not agent initiated? Otherwise I worry that some attorney for the receivership could try to say the client insisted only after you talked them into it by calling them first.
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Originally Posted by SportsNut
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...
You bring up a good point. In today's climate should we suggest multiple policies from different insurance companies to keep them within the 300k limits on death claims and also the 100k limits on cash for annuities? If we don't could they then sue us?
Last edited by SalemInsuranceGuy : 03-29-2009 at 04:54 PM.
Reason: Posts merged
That's a great idea Joe. Do you think you may want to add something saying the action was client initiated and not agent initiated? Otherwise I worry that some attorney for the receivership could try to say the client insisted only after you talked them into it by calling them first.
It may be a decade before we realize all the ramifications and consequences of this bailout mania. I don't think the Obama administration had a clue what they were starting. I remember the famous weekend, in which we HAD to get the first bailout approved. "The country will fail" if we don't do this IMMEDIATELY!. What a farce...
------------------------------------ "Conservative: A statesman who is enamored of existing evils, as distinguished from the Liberal who wishes to replace them with others." Ambrose Bierce
It may be a decade before we realize all the ramifications and consequences of this bailout mania. I don't think the Obama administration had a clue what they were starting. I remember the famous weekend, in which we HAD to get the first bailout approved. "The country will fail" if we don't do this IMMEDIATELY!. What a farce...
hmmm... seems I remember it was the Bush Administration that the bailouts started under.
In Sepember 2008, still during Bush, the Feds bailed out Fannie Mae and Freddie Mac. It had the net effect of making Shenandoah's and many others AA-Rated Preferred Stock worthless.
Also, the AIG bailout debacle, and many others, started under Bush (remember Obama and McCain rushing back from the Mississippi debate to vote on this):
That's a great idea Joe. Do you think you may want to add something saying the action was client initiated and not agent initiated? Otherwise I worry that some attorney for the receivership could try to say the client insisted only after you talked them into it by calling them first.
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You bring up a good point. In today's climate should we suggest multiple policies from different insurance companies to keep them within the 300k limits on death claims and also the 100k limits on cash for annuities? If we don't could they then sue us?
In my opinion it's always a good idea to keep annuity contracts under the thresholds of your respective state's guarantee association.
In my state we have 300K; so it is a little easier. In your state with a 100K cap it is more difficult.
As far as the RMD's are concerned Newby is exactly right. If the client's entire qualified portfolio was invested with a company that was in receivership; I would assume you would have to petition the deputy receiver to have the money released. At the very least the IRS should waive the penalty; but I have seen the IRS do far less.......... Good Question!
What is the old saying: "No News is Good News"?
I am not sure this is always true, but after the first initial shock, seems there has been no real negative news coming out of the situation.
The latest info we have gotten is there may be as many as seven major reliable "suitors" reviewing Shenandoah's situation, and possibly putting together their best offers. At the present time, I do not think anyone can predict exactly what will happen, but it appears with this much serious interest there may be a positive outcome.
We also have been told it may not be more than 1-2 months. This may have been pure speculation but this is seemingly better than no news at all.
Last edited by Joe Moore : 04-10-2009 at 05:46 AM.
What is the old saying: "No News is Good News"?
I am not sure this is always true, but after the first initial shock, seems there has been no real negative news coming out of the situation.
The latest info we have gotten is there may be as many as seven major reliable "suitors" reviewing Shenandoah's situation, and possibly putting together their best offers. At the present time, I do not think anyone can predict exactly what will happen, but it appears with this much serious interest there may be a positive outcome.
We also have been told it may not be more than 1-2 months. This may have been pure speculation but this is seemingly better than no news at all.
That's good news....sounds like it may or may not be "Shenandoah Life" anymore though? I wonder about the home office employees?
Are you Shenandoah Agents getting a lot of lapses now? Is business staying on the books or have you already replaced all of your business?
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Mark Rosenthal aka markingriffin
IMO/Ins Agent/Agent Trainer/Free Advice markcrosenthal@aol.comwww.realfastservice.com
Please visit mywebsite to learn more about me.
Email me for my Free Prospecting MP3 Tapes.
Are you Shenandoah Agents getting a lot of lapses now? Is business staying on the books or have you already replaced all of your business?
I've had a few that had term policies with me that simply canceled. I've had a few that wanted a different company. Most have stayed with Shenandoah Life.
I'll say this much for Shenandoah Life....they were always prompt in issuing policies....unlike, Lafayette Life...that takes 6 days for an underwriter to decide on a case that required a paramed exam and had received all of the information requested(paramed, urine specimen, and blood profile). Six days! Shenandoah always decided within 1 day when all of the requirements were received. Plus Lafayette Life takes 3-4 days to issue a policy after it's been approved!
I've also started writing United of Omaha life products. Half of the cases I've written and placed with them were issued with an incorrect spelling of the insured. My printing isn't great but how do you leave an "L" off of the name Russell?
I'll say this much for Shenandoah Life....they were always prompt in issuing policies....
Shenandoah had their act together in most areas of the insurance business. They would sometimes go through cycles of driving agents bonkers with too many "amendments" and picky-picky perfection issues on applications.
When the "Golden Promise" first hit the street, it was one of the best Final Expense policies on the market. When sales on this product went from $12 million/year to $4 million/year (mainly because of underwriting issues), they finally decided it was time to do something else in this market. Thus, came the New Vista which was on it's way to bringing back Shen in the Final Expense business. They were also profitable with most of their other products, and then along came Fannie Mae, Freddie Mac and Sigma Financial.
I have not even talked to anyone at Shenandoah this week, but last week the information was there were possibly at least seven companies looking to acquire them. I believe this story will have a decent ending.
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Originally Posted by Markingriffin
Are you Shenandoah Agents getting a lot of lapses now? Is business staying on the books or have you already replaced all of your business?
We have probably lost less than 2-3% of the policies on the books. Most folks are doing like my family is personally doing, keeping the coverage.
We could make much more money by replacing the policies, but really do not want to help destroy the company. Seems to me the right thing to do.
Last edited by Joe Moore : 04-23-2009 at 06:44 AM.
Reason: Posts merged
Odds of someone buying Shenandoah's blocks of business....65%.
Odds of Shenandoah emerging as Shenandoah, out of receivership and back in business....33%.
Odds of Shenandoah being liquidated....2%.
Joe...I agree, their Golden Promise was fun to write when I started writing for them over 10 years ago. I miss that product. I miss their prompt service and issuing of policies.
Re: Shenandoah Life Sales Suspended
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