Nothing of note from the ratings perspective but a few newsworthy items:
- Today's headlines included the surprise resignation of Mike Frasier as Chairman and CEO of Genworth Financial - a company that has struggled with its profitability since it was spun off from GE in 2004. Genworth is a major underwriter of individual long-term care insurance.
- Consistent with the decision to exit the life and annuity business, Hartford sold its variable annuity marketing organization to Forethought, a privately-held, diversified financial services company.
- We have mentioned the issue of unclaimed property for life insurers where death benefits have been unclaimed - and also where policies have lapsed due to no premium payments after a death without the life company being made aware a claim was due. This past month MetLife announced a settlement that could approach $700 million. Most importantly, industry practices are now changing to include regular checking of Social Security records to identify such unknown claims.
This past month we were asked to assist two different clients with a similar issue. Both held second-to-die universal life policies with one of the lives now deceased. The financial performance of both contracts was challenged due to lower interest rates than when the contracts were originally purchased, and one of them had a maturity date earlier than the life expectancy of the surviving insured. Both clients were surprised to understand that they were facing the reality that the policies would likely lapse or mature without any value.
Life insurance is a valuable asset, but all too often clients buy this asset and forget about it. Regrettably with time, the asset may not achieve its original intent. We are here to help manage such assets so surprises are minimized and the intended value of the policy is more likely to be achieved. Please give us a call if we can assist you or your clients in the review of their life insurance assets.