by John Darer® CLU ChFC MSSC CeFT RSP CLTC
Lincoln Financial Group announced January 19, 2018 that it has entered into a definitive agreement to acquire Liberty Life Assurance Company of Boston from Liberty Mutual Insurance Group. Upon completion of the transaction, Lincoln Financial will retain Liberty’s Group Benefits business and reinsure Liberty’s Individual Life and Annuity business to Protective Life Insurance Company ( a subsidiary of Dai-Ichi Life Holdings) The acquisition, which is expected to create a single, powerful Group Benefits operation with industry-leading products, services, and capabilities, is expected to be completed in the second quarter of 2018, pending regulatory approvals.
What Does this Mean to Liberty Life Assurance Company of Boston for new structured settlement business?
Liberty Life Assurance Company of Boston is no longer writing structured settlement annuities on either a qualified or non qualified basis.
What Does This Mean to Liberty Life Assurance Company of Boston annuitants?
Both Lincoln Financial (a Fortune 250 Holding Company) and Protective Life are regulated and rated A+ by A.M. Best. By comparison Liberty Life Assurance Company of Boston is rated A. In emails to its appointed agents Liberty emphasized that it will honor its commitments on in-force annuities. I have asked for further written confirmation. Protective Life was founded in 1907, with $78 billion in reported assets on its Form 10-Q for Q3 2017. Protective is owned by Dai-Ichi LIfe Holdings. founded in 1902. View Lincoln Financial Powerpoint on the Liberty Life Assurance Company of Boston acquisition Download LNC+Liberty+Acquisition+Presentation
Liberty Life will process current locked in business but will no longer accept premium from mid February 2018.
What Does This Mean To the Structured Settlement Industry?
Much of the non qualified structured settlement side will be absorbed by other sources, such as Havelet, SAI and National Indemnity reinsurance (where there is an insurance company paying on behalf of Defendants) and/or other alternatives. Metropolitan Tower Life Insurance Company recently entered the non qualified structured settlement market and offers a domestic non qualified assignment company, based in Delaware as opposed to Barbados. The limitations for the domestic company will be that non qualified structure design must comply with IRC 72(u), the most significant of which will be payments must start within 13 months (I.e. no later than deferrals beyond a year). But where Liberty would not entertain the use of its product for structured installment sales, Metropolitan Tower will. Metropolitan Tower recently announced its merger with another MetLife subsidiary General American Life, part of the "original game plan" for those who listened, that appears to further strengthen their offering.
The sky isn't falling! It surprises me that some of my industry colleagues tend to paint with a narrow tip negative brush whenever there is change in the industry. Many of the newer entrants to our industry have no idea about companies long gone from the industry such as Commonwealth, United Pacific Life, Presidential, Manulife, Confederation Life, Peoples Security, Security Life of Denver (ING). The bottom line is that you can't avoid change but you can manage the change. Pacific Life only entered the structured settlement market in 2012 and in 2017 was the second biggest in terms of production.
What Do You Do If You Have a Liberty Life Assurance Company of Boston structured settlement and are approached by a company offering cash for your structured settlement?
The secondary market's cockroaches come out of their burrows whenever a company exits the marketplace and try to scare annuitants so that they or their investors can make fat profits. Ignore them. In 2008, they scurried about scaring annuitants they could sucker from American General ( a subsidiary of AIG, that wasn't leaving the business). A decade later American General continues to honor its commitments and those suckers lost a fortune. More cockroaches came out when John Hancock and Allstate exited the market in 2013.
Some will offer to help you "manage your annuity", or give you information that is often incorrect, Anytime you see or hear from one just remember that their solution is fleecing you for cents on the dollar.
More details to follow.