A-Cap suspends Sentinel Security Life business; gets reprieve for Atlantic Coast Life
January 7, 2025 by John Hilton
Update: A-Cap provided a second statement addressing Utah’s financial audit of its assets. See below.
Sentinel Security Life Insurance Co. has suspended writing new business until a judge hears its appeal of a Utah order in March.
Sentinel Security is in such poor shape financially, Utah regulators say, that it is using new premium to meet ongoing financial obligations as they come due. The Utah Insurance Department order barred Sentinel Security Life Insurance Co. from writing new business after Dec. 31, 2024.
Wink’s Moore on the Market: Many of you saw a post that I made last week, wondering why a certain A-Cap company was changing rates after 12/31/24- a date when the insurers owned by the company were told by regulators to halt business by.
Well- guess what? Atlantic Coast Life Insurance Company was granted a stay.
So, game on!
Sentinel Security Life Insurance Co., on the other hand, has suspended business- with the hopes that Utah will see the light soon.
The company had this to say:
“The disagreement with Utah boils down to the regulator’s reliance on a flawed valuation analysis. While A-CAP’s valuation of its assets has been reaffirmed by highly-experienced, credentialed and independent valuation firms, the regulator relied on a deeply flawed valuation. That valuation analysis was obviously wrong in numerous ways – as just a few examples, it used comparisons to firms in completely different industries; it ignored the liquidation value of our assets; and perhaps most important, it applied a 22% discount rate to conclude that productive aviation assets have an unrealistically low present value.
If the regulator had relied on a proper analysis and used an appropriate discount rate, it would have concluded that all of these assets are worth at least par. We continue to work in good faith to address Utah’s concerns, but the regulator should not have taken such drastic action based on an obviously mistaken analysis.”
Thanks so much for the low-down John Hilton with InsuranceNewsNet. Stay tuned for the latest! -sjm
