CRIPES. It is BAD.

I had previously read that two annuitants had not been made whole by the falling-from-grace of Global Bankers Group. This includes Bankers Life Insurance Company, Colorado Bankers Life Insurance Company, and Western Bankers Life Insurance Company, who all offered annuities.

That information was wrong. Very wrong.

As Mark Maremont and Leslie Scism of The Wall Street Journal point-out, “Even if the insurers go into liquidation, some 1,600 annuity owners wouldn’t be fully covered, because they collectively invested about $250 million more than their state’s reimbursement caps, filings show.”

Plus, THIS concerns me:

“A liquidation [of these insurance companies] could be the third-costliest U.S. life-insurance failure. Association officials have made preliminary estimates that they might bill insurers nearly $1.5 billion to cover the shortfall.”

Ironically, they state:

“Mr. Lindberg has done nothing wrong…” and “…[he} has always done the right thing for policyholders,” and yet- “Some 70,000 holders of annuities totaling $2.2 billion are unable to withdraw their money.”

Yes, that is “doing the right thing” all day. These are RETIREES. They were counting on this money!

PLEASE learn a lesson from Joanne Flynn in this article- DO NOT place more than $250,000 of your clients’ money with any one insurance company!

Of note: “There also are about 2,500 people, many outside the U.S., who bought hundreds of millions of dollars of financial products from Mr. Lindberg’s Bermuda entities, which are in liquidation proceedings. Those products aren’t expected to be covered by the safety-net system in the U.S.”

Just because an insurance company has the highest MYGA rates does NOT mean you should do business with them!

My thanks to Bill Comfort, CSA, CLTC®, with Comfort Assurance Group, in bringing this one to my attention.

I am physically ill. This is annuities gone wrong. – sjm