Conseco Redux

John Ryan, a planner from Highlands Ranch, Colorado, says that he is concerned about Conseco policies for his clients and will be closely watching those policies already in place to ensure that they are not adversely affected by the bankruptcy proceeding. But Mark Lubbers, executive VP in corporate affairs for Conseco, says that the insurance companies are “the most settled question in this whole process.” He cites a statement from the Texas commissioner of insurance, Jose Montemayor, that emphatically states that the insurance companies are protected by a “firewall” from the parent company. His statement echoes that of the Michigan Office of Financial and Insurance Services Commissioner, Frank M. Fitzgerald. Both men stress that the insurance companies are governed by state laws “designed to protect the interests of . . . policyholders. Insurance companies are not eligible to file for bankruptcy under the federal bankruptcy code.”

In addition, Lubbers points out that agents may urge clients to move annuities to another company through a motivation “to ‘earn’ another first-year commission.” This, he says, is unrelated to Conseco’s current situation.–Marlene Y. Satter