ELNY Information


In 1991, New York State regulators took over Executive Life of New York (ELNY), a faltering insurance company known for its aggressive underwriting and for investing heavily in "junk" bonds. Since then ELNY has operated under a court-approved rehabilitation plan administered under the auspices of the New York Insurance Department.

On September 1, 2011, the Insurance Department moved for liquidation of ELNY, citing a growing shortfall in assets made worse by the financial collapse of 2008. The liquidation, under a plan that remains subject to court approval, is not expected to be implemented until sometime in the second half of 2012.

According to the regulators, the liquidation plan will not result in benefit reductions for most payees under ELNY annuities. They can expect to continue receiving annuity payments on time and in full. For approximately 15 percent of all ELNY annuity payees, the plan is expected to lead to benefit reductions.

The NSSTA created this section to provide information (including links) for two reasons:

  • To help ELNY annuity payees affected by this liquidation to understand their options, including access to an independent $100 million "hardship fund" that is being established for their benefit; and,
  • To explain what happened with ELNY, specifically how risky business practices pursued by Executive Life in the 1980s -- practices that have since been prohibited - caused this situation.

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What happened with Executive Life of New York (ELNY) and Executive Life Insurance Company of California (ELIC)?

ELNY and its affiliate ELIC wrote annuity contracts in the early and mid-1980s. The companies were known for aggressive underwriting and for investing in junk bonds. ELNY is believed to have issued its last structured annuity in 1988.

For more about ELNY's history, click here for background prepared by the New York Insurance Department.

New York and California insurance regulators placed both companies in rehabilitation in April 1991. ELIC was liquidated the next year. ELNY remained in rehabilitation, continuing to pay annuity benefits in full, under a court-approved rehabilitation plan.

Why is Executive Life of New York liquidating?

As Benjamin Lawsky, Superintendent of the New York State Department of Financial Services (successor to the New York Insurance Department), said when his office filed the ELNY liquidation plan in 2011, "Executive Life does not have enough assets to meet all its obligations, a fact made far worse by the recent financial crisis."1

How many people will face annuity benefit reductions?

Most ELNY payees will be fully protected by state Life and Health Insurance Guaranty Association coverage and other enhancements provided by life insurance companies. For information about state Guaranty Association coverage, click here for the website of the National Association of Life & Health Guaranty Associations (NOLGHA).

Preliminary ELNY filings, based on calculations as of January 1, 2012, show that under the proposed liquidation plan, 1,502 ELNY annuity payees will face benefit reductions, typically because their benefits exceed applicable Guaranty Association coverage limits.

Of the annuity payees facing benefit reductions many will be in a position to recover lost benefits from liability insurers or other parties with continuing obligations. Payees who cannot recover from that source should be able to recover part of their lost benefits from the Hardship Fund.

What is the position of the NSSTA on the ELNY Liquidation?

The NSSTA's position has always been that it is never acceptable for any life insurance company to fail to make full payments to annuity payees. We have carried this message aggressively and persistently to New York officials and industry leaders.

What options does an ELNY annuity payee have if he or she has been notified that future benefits will be reduced?

According to the New York State Department of Financial Services, a group of insurance companies has created a Hardship Fund of approximately $100 million. This Fund is expected to be independent of New York regulators and the court overseeing the ELNY liquidation. The Fund's goal is to disburse its assets to ELNY annuity payees who submit claims, based on an objective assessment of their needs.

NSSTA strongly encourages all ELNY annuity payees facing benefit reductions to apply for support from the Hardship Fund. Applications for Fund support are expected to be distributed directly to payees who have been notified that their benefits will be reduced. For more information about the Hardship Fund, please call toll free at 1-888-809-2254.

Where can someone go for more information about the ELNY liquidation?

New York regulators have set up a website on the ELNY liquidation with extensive information on guaranty association coverage, payments and next steps. For more information, click here.

Susan Voss

"Someone considering a structured settlement should appreciate the important legal safeguards for those future payments.  State regulators nationwide have a strong record of enforcing the many consumer protections that help guarantee a structured annuity's financial security.  Our commitment and today's updated laws offer exceptionally effective financial security far into the future."

The Honorable Kevin M. McCarty
National Association of Insurance Commissioners*

*The NAIC is an association of state government officials who regulate the conduct of insurance companies.

ELNY and ELIC were placed in rehabilitation in 1991. What steps have been taken since then to protect consumers?

Since 1991, lawmakers and regulators have instituted a series of consumer protection laws and regulations that directly benefit annuity payees and help to assure that there will be no repetition of the Executive Life situation. These rules include:

  • Tightened accounting rules with a special focus on investment risks,
  • Mandatory annual audits,
  • Stricter rules for permitted investments,
  • Higher minimum surplus requirements,
  • Independent reviews and spontaneous audits to ensure compliance, and
  • Increased Guaranty Association coverage limits.

As a result of these and other consumer protections, your structured annuity is:

  • Backed by exceptionally safe "investment grade" assets, and
  • Issued only by life insurance companies which rank among the world's most stable and secure financial institutions and which operate in a regulatory environment specifically designed to prevent high risk investment strategies.

For more information, click here for a free NSSTA handout.


  1. "New York Files Executive Life N.Y. Liquidation Plan," National Underwriter, September 7, 2011