Forbes calls Philip A. Falcone a former Harvard hockey player billionaire but the New York Superintendent of Financial Services is calling him banned from the business.
Superintendent Ben Lawsky ordered hedge fund impresario Falcone barred from exercising direct or indirect control over the management, policies, operations, and investment funds of Fidelity & Guaranty Life Insurance Co. of New York or any other New York-licensed insurer for a period of seven years due to an Aug. 16 Securities and Exchange Commission (SEC) consent action against Falcone and Harbinger Capital Partners LLC.
Lawsky stated that the SEC settlement detailed admitted facts and wrongdoing that demonstrate serious issues “related to Mr. Falcone’s fitness to control the management, operations, and policyholder funds of a New York insurance company.”
At the same time, Fidelity New York agreed today to put in place a series of enhanced policyholder protections – modeled on those that other insurers owned by private equity firms and investment companies have established at the request of the New York State Department of Financial Services (DFS).
These include maintaining risk-based capital levels (RBC Levels) at an amount not less than 450 percent and establishing a separate backstop trust account totaling approximately $18.5 million to provide additional protections to policyholders above and beyond the heightened capital levels if Fidelity New York’s RBC levels fall below 450 percent.