NU Online News Service
The parent of a Midwestern life insurer has responded to the turmoil in the stock and bond markets by turning control of the company over to state regulators.
The board of Standard Life Insurance Company of Indiana, Indianapolis, has agreed to permit Indiana Insurance Commissioner James Atterholt to place the company in rehabilitation, the company says.
Standard Life, a company that specialized in selling annuities, generated about $30 million in individual annuity premium revenue in 2007 on $2 billion in admitted assets, according to Highline Data, a unit of Summit Business Media L.L.C., New York, the parent of National Underwriter Life & Health.
The company now has 38,758 annuity contracts in force, state officials report.
Standard Life, which has no connection with Standard Insurance Company or other units of StanCorp Financial Group Inc., Portland, Ore., has suffered investment portfolio losses due to a “number of investments that declined or became impaired,” the company says in a document posted on its Web site.
“The vast majority of the investment portfolio is government backed and includes quality corporate bonds,” Standard Life says. “The investment portfolio is performing and is structured to mature with our contractual obligations. We believe the current market value impact of our investments is a temporary condition that will recover in time.”
But, if Standard Life were forced to provide full surrenders, that “would create a fire sale of the assets which would further impact the overall financial condition,” the company says.
Capital Assurance Corp., Prospect, Ky., the parent of Standard Life, which was formed to acquire the insurer in 2005, has tried to help its subsidiary cope with the market turmoil by putting $18 million in capital into the company, but additional capital has not been available, according to Standard Life and state regulators.