Executive Life Insurance Company of New York (ELNY) was placed into rehabilitation in 1991 after affiliated companies became insolvent and concerns about its future solvency arose. The rehabilitation plan adopted in 1992 involved the transfer of much of ELNY's business to another carrier; however, ELNY in rehabilitation retained substantial assets and continued payment on certain annuities, with the bulk of the payout going to structured settlement annuitants that had received long-term and/or lifetime annuities as settlements in personal injury lawsuits. The retained assets have not performed as originally projected and current projections indicate a future shortfall of hundreds of millions of dollars in approximately 12-15 years if no action is taken, jeopardizing the annuity payments to thousands of accident victims, as well as pensioners.
On December 4, New York Governor Eliot Spitzer, in conjunction with the New York Liquidation Bureau (NYLB), announced an "agreement in principle" to resolve the shortfall and assure future payments. Click here to read the full press release from the Governor's office. The proposed resolution arises from discussions between the NYLB and various interested parties, including guaranty associations, life insurance industry participants and certain P&C companies that insured defendants in the settled lawsuits. The National Organization of Life and Health Guaranty Associations (NOLHGA) also issued a press release concerning the proposed agreement, noting that while "significant progress" has been made on resolving the ELNY situation, "much work remains ahead for all parties". Click here to read the full press release from NOLHGA.