by John Darer CLU ChFC MSSC RSP CLTC
If there' s a lesson to be learned from the handling (or mislhandling as they case may be) of Executive Life Insurance Company of New York debacle is that a well thought out long term approach is critical. The Hartford is not going into liquidation or rehabilitation, but regulators will face critical decisions in the future if a spin off of the certain aspects of The Hartford's operations is to be approved and proceed.
The March 22, 2012 Wall Street Journal contains another excellent piece on The Hartford "break up" story by the trio of Leslie Scism, Erik Holmand Gina Chon, which features quotes from current and former insurance regulators that underscore that regulatory approval is necessary for any action and that protection of policyholders is paramount.
Former New Jersey Insurance Commissioner Tom Considine
“Sometimes, masters of the universe don’t realize that regulators really do have the ability to say no"
"Spinning off the property-casualty business, and leaving a “less vibrant part behind would be closely scrutinized,” he said, adding: “Approval would be unlikely in this environment.”
Former Connecticut Insurance Commissioner Thomas Sullivan
" a spin off would be viewed “with a jaundiced eye.”
Current Connecticut Chief Insurance Honcho Thomas B. Leonardi
“Certainly, in any such regulatory approval process that involves a Connecticut-based carrier, policyholder protection is paramount".
#ELNY #ExecutiveLifeofNY #HankPaulson