This month, we are presenting a very special editorial project, an investigation into the rehabilitation, restructuring and liquidation of the Executive Life Insurance Company of New York, or ELNY. ELNY,as many in the industry generally know, languished in state receivership for an astounding 21 years before the state decided to liquidate it. The ELNY story is one where the more one looks into it, the more irregularities one discovers. The way in which ELNY was taken into receivership was questionable. The conduct of the New York Liquidation Bureau for just about the entire time it managed ELNY was deplorable. The lack of oversight the Bureau received over the years from the Superintendent of Insurance is a black mark on that office and all who held it. And the failure of the Governor of New York to keep this issue on a front burner is a similar governance failure.

The moment ELNY went into receivership, it crossed the point of no return, and whether the company knew it or not, it was doomed. Doomed to be mishandled by those either too apathetic or too incompetent to deal with this company’s challenges in a constructive way. Doomed to be fleeced by what appears the have been endemic corruption at the Bureau. And its customers, doomed to be wronged by a process that never once put the fiduciary responsibilities that ELNY and the Bureau had to the public on the front-burner. The whole thing brings to mind that the name of the Bureau is “Liquidation,” not “Rehabilitation,” which tells us everything we need to know about how serious that group is about trying to fix things.

ELNY is, quite simply, the most egregious example of insurance regulatory failure I have seen in my career as a journalist. It has resulted in the financial ruin of hundreds of innocent people whose chief takeaway from this whole thing is that insurance is not to be trusted. Seeing what they have all gone though, who can blame them for thinking that way?

This story matters to everyone in the insurance industry because it is an example of just how much farther insurance regulation has to go before it can be relied upon to handle the industry’s biggest challenges. It matters because what we have here is a breaking of the fundamental trust between insurer and insured, and between the public and the government. And it matters because innocent people are being hurt by the very products, the very industry, the very system that is supposed to be protecting them.

I hope you’ll read “The Complete ELNY Saga,” and send us your comments on it. And if this story leaves you wondering what can be done, then contact Governor Cuomo, contact Department of Financial Services  head Benjamin Lawsky, and contact any consumer advocacy or state legislator you can and show them this story. What happened with ELNY probably won’t happen again any time soon, but then again, it should never have happened in the first place, either. Anything is possible…including fixing this problem before it ends up hurting a lot of people who have suffered enough already.