On August 8, 2013, the Executive Life Insurance Company of New
York (ELNY) Restructuring Agreement closed, following the denial of
the last relevant appeal of the trial court's Order of
Liquidation and Approval of the Restructuring Agreement in May
2013.
With the closing of the Restructuring Agreement, approximately
1,500 ELNY annuities began to experience shortfalls, meaning less
than the full amounts of the annuity payments are being made by the
captive insurance company formed in connection with the
Restructuring Agreement, Guaranty Association Benefits Company
(GABC). At the same time, the final amounts of those shortfalls
have not yet been determined, although that is expected to occur
within the next month.
In light of these events, many ELNY annuity owners are now
directly confronted with numerous issues related to their exposure
on the shortfalls, and are trying to determine what exactly they
need to do to protect their interests, and when they need to do it.
These issues include understanding Schedule 1.15 to the
Restructuring Agreement, which sets forth in detail the amount of
benefits that would be allocated to each of the ELNY annuities;
analyzing whether those benefits comport with the amounts to which
annuity owners are entitled under the various state guaranty
association acts; analyzing how shortfalls otherwise may be reduced
or eliminated; assessing methods of funding any shortfalls, both in
the short-term and long-term; and understanding the various other
agreements and schedules related to the Restructuring Agreement,
including the ELNY Facilitation Plan and the GABC Owner Payment
Schedules. We have analyzed these and other issues for many ELNY
annuity owners.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.