AVIVA exits the structured settlement market
Tuesday, December 16, 2008 at 09:58AM And then there were ten....
In some really stunning news for the structured settlement industry, Aviva announced today that it will be exiting the structured settlement market. This follows on the departures over the last few years of Mass Mutual Life, Genworth Financial and AEGON, all of whom were major markets and industry leaders with solid credit ratings.
I'll be doing a follow up post and video interviews with several of the key players in this recent news, so until then i'll refrain from speculation and rumor as to the process that led to this decision. Lets wait to hear what the company has to say and see where the news leads.
However, I can tell you as someone who at one time was critical of Aviva several years ago as to their marketing, management and processing, that this is a big loss for the industry. This division under the leadership of Pauline Jenkins made a huge turn around over the last few years, increasing market share substantially, eliminating policy issue bottlenecks, improving front end sales process and hiring of quality staff at the Quincy, MA location. At a time when many life markets had pulled in their reins, Pauline and the group over at Platinum Marketing, had quietly and efficiently built a powerful sales and marketing organization that was a pleasure to do business with. Their willingness to look at new markets, handle difficult or challenging cases and resolve problems really stood out and i'm going to be sorry to see them go. It's a great group of professionals and people and i'm sure this is just a real kick in the pants to them, particularly the week before Christmas in the middle of a recession.
You have to wonder what the corporate parent, which has enjoyed a steady improvement in it's credit rating and image over the last five years, was thinking to pull the plug on a division that has shown the growth and measurable improvement that Aviva has over the last three years. To see what that group has done under the duress of weak credit ratings a few years ago is amazing, and now when they seemed poised to take a run at industry leadership and market share, to have the rug pulled out from above is going to be tough for those at Aviva and Platinum to swallow i'm sure.
Stay tuned, we will have some very interesting interviews and news on this latest body blow to the settlement industry.
The Settlement Channel
One additional element to the Aviva exit from the structured settlement market is to remind policyholders, attorneys and others that this is not a reflection of any negative financial health of the company or financial issues.
This is a solid, highly diversified insurance company with a huge asset base and some of the highest possible credit ratings.
Do NOT fall prey to any financial hucksters or scare mongers about the safety of Aviva, their annuity contracts, their structured settlement business or life insurance. This was a product line decision similar to those made by other big players.
Also, there are still many substantial annuity and life insurance companies that are marketing structured settlement annuity contracts, among them Pacific Life, John Hancock Life, Prudential Insurance, Met Life, Hartford Financial, New York Life, Liberty Mutual, Symetra, Allstate and American General.
The Settlement Channel
What follows below is the text, edited by my office to remove phone numbers and contact information, from Aviva regarding their exit from the structured settlement industry today.
Aviva USA -- which includes Aviva Life and Annuity Company and Aviva Life and Annuity Company of New York -- has announced that it is discontinuing its structured settlements business, effective immediately, and will no longer write any new business within this product category.
Our decision to exit this segment of our business will allow us to focus on our core lines of business -- life insurance and annuities.
First and foremost we want to assure you of our continued stability and strength, evidenced by the recent re-affirmation of our ratings by a host of major rating agencies, including A.M. Best and Standard and Poor’s.
We understand this decision will leave you with many questions regarding pending and in-force business. The following is a summary of the changes in effect immediately.
Structured Settlements & Reinsurance Agreements:
- All quoting of new business for the structured settlement product must cease immediately;
- We will honor all quotes run on or before 12/16/08, with a purchase date of 12/29/08 or sooner;
- All lock-ins, confirmed prior to 12/16/08, will be honored;
- No interruption to service for pending and in-force contracts;
- Capital Maintenance Agreement (CMA) remains in place for contracts assigned to the Aviva London Assignment Corporation; and
- Underwriting: No new rated ages will be issued after 12/16/08.
Single Premium Immediate Annuities, Aviva Income Secure and Family Solution Immediate Annuities (“SPIA”):
- Aviva will continue to accept new SPIA premium and service all SPIA business; and
- Aviva will no longer issue rated age SPIA’s.
In the near future, a member of our Sales organization will be in contact with you to discuss any matters relating to our business announcement today.
Again, the Settlement Channel will continue to follow and report on this news, focusing on it's impact to the profession, NSSTA, plaintiff issues and other matters of importance to the settlement profession and those who own and hold Aviva annuity contracts.
Reader Comments (4)
I got the same notice and we will be doing a post on it tomorrow morning. I don't think it's as bad as you might suspect, but we have been doing research on this and will discuss it tomorrow once we have spoken to people at several life markets.
I have a related blog and was wondering if you'd do a link/blogroll exchange with me that would
benefit us both.
Mine is http://usstructuredsettlement.blogspot.com/
Title: Structured Settlements
If you are willing-to keep it simple, just go ahead and put up my link-then email me your details
and I will reciprocate.
Thanks,
Tassanee
wangkeeree@gmail.com