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May 22, 2024

Troubled insurer ordered to undergo rehabilitation proceedings

PHOTO | CONTRIBUTED Connecticut Insurance Commissioner Andrew N. Mais.
By Andrew Larson

A Superior Court judge placed Hartford-based PHL Variable Insurance Co. into rehabilitation proceedings and appointed Connecticut Insurance Commissioner Andrew N. Mais as the statutory rehabilitator of the company and its subsidiaries.

The Connecticut Insurance Department (CID) filed the petition for rehabilitation on May 17, under the Connecticut Insurers Rehabilitation and Liquidation Act, which provides a framework for the rehabilitation and liquidation of insurance companies operating in Connecticut that are found to be financially troubled.

On Monday, Superior Court Judge Daniel Klau approved a rehabilitation order. Mais expects to develop a plan of rehabilitation for the company over the next 12 months, subject to the court’s review and approval.

PHL is a Connecticut-domiciled insurance company that issued life insurance and annuity products and related supplemental contracts to policyholders nationwide. Its subsidiaries are Concord Re Inc. and Palisado Re Inc.

The CID found that PHL’s companies were in a “hazardous financial condition,” and on March 31, Mais placed the company under administrative supervision, court documents state.

“The supervision order was determined to be necessary as a result of the continued deterioration of the companies’ financial condition as well as uncertainty about its ability to remedy its financial condition,” according to the petition.

The company has aggregate capital and surplus of about -$900 million; aggregate assets are projected to be exhausted in 2030, according to the filing. By that time, about $1.46 billion of policyholder liabilities will remain unpaid.

Mais said the filing “underscores the CID's commitment to protecting consumers and ensuring the availability of a financially sound insurance industry in Connecticut.”

The Superior Court also entered an order imposing a moratorium limiting payments under some policies while the rehabilitation plan is developed. The moratorium will not have any immediate effect on recurring payments and death benefits for most policy and annuity holders, according to the CID. 

Life insurance and annuity holders will receive a letter detailing any restrictions on their policies, the CID said.

PHL is wholly owned by GG Holding Co. Previously, PHL was a direct subsidiary of Nassau Insurance Group.

For more information, visit CT.gov/cid.phl.

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