Summary
Policyholders have been unquestionably placed in a position of attempting to procure compensation, while being faced with governmental intervention in an effort to control payments.
Analysis
The determination of the government in its attempts to manipulate possible payment schemes for the victims who loss funds over the collapse of a major insurer appears unprecedented, particularly given the fact that it is government and public entities who are charged with the responsibility of regulation.
Many policyholders who purchased Equitable Life pensions were professionally advised. The products were also offered based on the premise of a guaranteed annuity rate. Unfortunately, this guarantee has now been diminished.
Public apologies by the government don’t make up for the fact that most of these policyholders are much older now and many have passed away, magnifying the situation even more.
Certainly, taxpayers should not be overly burdened by making payments as a result of any failed regulatory oversight. However, it hardly seems fair that policyholders who expect a certain amount from their pensions, receive a reduced amount, through no fault of their own.
Given the fact that a policyholder coalition has recently won a decision to a legal hearing, allowing them to challenge the government for alleged unfair compensation, it’s possible that policyholders may receive the proper guaranteed annuity rate. It’s questionable as to how much compensation could be paid at this time. It appears certain though, that this situation is far from over.
This author consults with leading institutions through GLG
Analyses are solely the work of the authors and have not been edited or endorsed by GLG.
