by John Darer® CLU ChFC CSSC RSP CLTC
Under a new corporate guarantee for New York structured settlements announced January 17, 2012, AGC Life Insurance Company will guarantee the obligations owed to structured settlement claimants under Qualified Assignments in the State of New York entered into with American General Annuity Services Corporation (AGASC). AGC Life Insurance Company is a Missouri-domiciled life insurance company and an intermediate holding corporation and owner of certain major affiliated life insurance companies of AIG.
A copy of the structured settlement guarantee can be found at the following link Download Corporate Guarantee-AGC Life Insurance Company Guarantee of AGASC-specimen
The improvement is a welcome return of American General's New York structured settlement program to a transactional structure similar to what existed prior to the AIG purchase, when VALIC was its New York underwriting company. It also aligns its New York program with its structured settlement program outside of New York. Since the AIG acquisition of American General in 2004 and prior to this latest development, the New York program offered no guarantee of the assignment company.
Annuity Issuer: The United States Life Insurance Company in the City of New York (USLife).
Assignment Company: American General Annuity Service Corporation (AGASC)
Corporate Guarantor: AGC Life Insurance Company (AGC Life)
Caveat For Certain Existing Structured Settlement Annuitants
It is unclear whether or not structured settlement annuitants who took structured settlements with American International Life Assurance Company of New York (AILife) AFTER the post bailout restructuring of certain AIG insurance subsidiaries (effective July 1, 2009 as to the structured settlement annuity program), or with United States Life Insurance Company in the City of New York after the merger between it and AILife made it the New York underwriting company, but prior to the January 17, 2012 announcement, will have the benefit of the AGC Life Insurance company guarantee. This author contacted an American General company executive for comment and the executive indicated that he would check into it. We are also interested in how funded cases that have not yet been issued (e.g.awaiting Court approval) will be treated.
With AILife structured settlements written between 2004 and 2008, the qualified assignee was either American Home Assurance Company, or National Union Fire Insurance Company of Pittsburgh, PA (if an AIG case where American Home Assurance Company was the Defendant's insurer). Both of these entities are insurance companies, which generally cannot file for bankruptcy protection.
In the restructuring following the AIG bailout in 2008, National Union Fire and American Home were segregated under the Chartis umbrella. While structured annuities issued by AILife/USLife and American General are eligible in the Chartis structured settlement program, neither of the companies is a Chartis subsidiary.The American General structured settlements retained the AGC Life insurance Company guarantee that existed prior to the AIG acquisition in 2004, but after restructuring, from July 1, 2009, the qualfied assignment company for prospective cases using the New York licensed annuity issuer was the special purpose shell company AGASC (not an insurance company), with no guarantee for New York. To be clear, during the same time period the assignee DID have a guarantee where the AGASC funded its obligations using the non-New York licensed American General Life. This affected July 1, 2009 to January 16, 2012 issued cases with AILife and later USLife structured settlement annuitants. This was seen as a negative by some, which has now been addressed, at least for new USLife structured settlement annuitants.
We will let readers know when we hear back on how the annuitants with July 1, 2009 to January 16, 2012 issued cases with AILife (and later USLife) structured settlement annuties will be treated.
Post Script; We understand that the AGC life guarantees only apply on AIG subsidiary issued New York structured settlements from January 17, 2012.