According to a press release dated December 4, 2007 , New York "Governor Eliot Spitzer was joined by New York State Insurance Superintendent Eric Dinallo to announce an agreement in principle that will protect nearly 11,000 accident victims and other individuals receiving annual payments from structured settlements and pensions.
The New York Liquidation Bureau has successfully resolved a significant deficit from defunct insurance company, Executive Life Insurance Company of New York (ELNY) that potentially threatened annuity payments to nearly 11,000 disabled and dependent individuals 12-15 years into the future. In 1991, the Liquidation Bureau took over distribution of ELNY’s assets and obligations after the company became insolvent. According to the 12/4/2007 press release, "more than five years ago it became clear that ELNY was threatened by a substantial shortfall, but the problem went unaddressed, jeopardizing the primary financial lifeline of thousands of victims of cataclysmic injuries and pensioners",
Mark Peters, Special Deputy Superintendent in charge of the New York Liquidation Bureau, was quoted: “It was the Liquidation Bureau’s responsibility to take action on the looming ELNY deficit. The Bureau worked intensively to craft a solution that will result in a significant cash infusion (believed to be in the neighborhood of $600 million in today's dollars; on December 10, 2007 the number was reported in "Business Insurance" to be between $650-$750 million), thus protecting ELNY beneficiaries". It is my understanding that the NSSTA Executive Life of NY Task Force was actively involved in the process along with other stakeholders. The proposed plan, subject to approval of the Supreme Court of the State of New York, County of Nassau, "is designed to continue paying all annuitants 100% of their benefits" (underlined for emphasis). The cash infusion comes from life insurers and those property and casualty insurers holding structured settlement annuity contracts.
Skittish P&C insurers should know that today most annuity based structured settlement transactions, involve a qualified assignment where the P&C insurer does not hold the annuity contract. Structured settlements may be funded via structured settlement annuities or US government obligations (T Bond trusts).
Link to the December 4, 2007 Eliot Spitzer Press Release on Executive Life of New York click here
Further Background Information on Executive Life of NY
Insurer Has Big Investor: Metropolitan January 21, 1992 New York Times. A refresher for anyone wanting to know the role of MetLife in the ELNY rehabilitation. I've heard different representations of the facts over the years. Important for newer settlement professionals to know contemporaneously written history to go along with the anecdotal.
New York Announces Plans For Executive Life Bailout, January 22, 1992 New York Times. Further details important to having a proper knowledge foundation about this matter.
Executive LIfe of NY Order of Rehabilitation April 23, 1991. Supreme Court of the State of New York, County of Nassau