Advisors who want to know how state insurance regulators and state guaranty associations are handling annuity issuer liquidations now have a new example to watch: Colorado Bankers Life Insurance Co.
Colorado Bankers Life was one of the companies at the center of the dispute between Greg Lindberg and regulators in North Carolina and elsewhere.
A North Carolina state court put the company and an affiliate in liquidation in November 2024, and the state life and health insurance guaranty associations — entities that provide some protection for life, health and annuity customers when issuers fail — hired Continental General to administer the affected Colorado Bankers Life insurance policies and annuity contracts and manage customer relations.
The guaranty associations have posted a guide that explains how Continental General's assumption of the Colorado Bankers Life products works and what that means for the customers.
What it means: The guide may give advisors and clients ideas about how other moderately big issuer liquidations might work.
The guide: The guaranty associations tend to use the terms "policies" and "annuities" interchangeably in some places.
Owners of annuities issued by Colorado Bankers Life "do not need to take any action to maintain coverage for covered obligations or to ensure that their coverage is assumed by Continental General," the associations say in the guide. "The process is designed to seamlessly provide continuing coverage for covered obligations without the need for the policyholder to take any further action."
The guaranty associations are only required to cover obligations up to limits set by state laws.
"Continental General is not assuming responsibility for the uncovered obligations," the associations warn.
Customers could get additional payments as a result of litigation against the ultimate owners of Colorado Bankers Life and the affiliate, the associations say.
The associations advise consumers to ask Continental General about their coverage and to ask the guaranty associations in their states any questions about guaranty-related matters.
Credit: Budairomi/Adobe Stock
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