PHL In Rehabilitation – Summary of Moratorium Order

June 25, 2024

The Moratorium Order may affect policyholders’ rights as described below. Payments of benefits under life insurance policies and annuities described in Sections II and III below are subject to the aggregate limits described in Section IV. Please read this description in its entirety.

  1. DEFINITIONS
    • “Guaranteed Account” means the general account of PHL Variable Insurance Company and the Market Value Adjusted Guaranteed Interest Account (also referred to as the "PHLVIC Non-unitized Fixed Separate Account"), a non-unitized separate account of PHL Variable Insurance Company.
    • “Interim Period” means the period between the date of the rehabilitation order and the date a plan of rehabilitation is confirmed.
    • “Petition Date” means May 17, 2024, the date on which the Insurance Commissioner of the State of Connecticut filed a petition commencing rehabilitation proceedings for PHL Variable Insurance Company.
    • “Policies” means PHL Variable Insurance Company issued life insurance policies and annuities, except where the context requires otherwise.
    • “Recurring Periodic Payments” means one or more of fixed periodic payments, systematic withdrawals or guaranteed lifetime withdrawal benefits that were in place as of the Petition Date.
    • “Required Minimum Distribution” means the minimum distributions required under applicable tax laws to be withdrawn from tax deferred retirement accounts.
    • “Separate Account” means collectively, PHL Variable Accumulation Account, PHL Variable Accumulation Account II and PHLVIC Variable Universal Life Account, each a unitized subaccount registered as a unit investment trust under the Investment Company Act of 1940.

  2. LIFE INSURANCE
    1. Death Benefits Under a Variable Life Insurance Policy. If your policy so provides, a death benefit may be paid, in accordance with the terms of your policy, to the full extent of the Separate Account value attributable to your insurance policy. In addition, if the amount of the death benefit payable under your insurance policy exceeds any Separate Account value receivable by you under your policy, which means that such further death benefit would be funded by a Guaranteed Account, then such further death benefit may be paid in an amount equal to the lesser of (x) the unpaid guaranteed amount of such benefit or (y) $300,000.
    2. Death Benefits Under a Life Insurance Policy other than a Variable Policy. All policies of life insurance that are not variable life insurance policies will receive death benefits equal to the lesser of (x) the amount of death benefits payable under the policy or (y) $300,000, subject to the terms of the policy.
    3. Surrenders, Withdrawals and Loans under a Variable Life Insurance Policy. You will be allowed to exercise surrender, withdrawal and loan options under your policy to the full extent of the Separate Account value attributable to your insurance policy. If you also allocated amounts to one or more Guaranteed Account investment options, you will not be allowed to access that value through surrender, withdrawals or policy loans.
    4. Surrenders, Withdrawals and Loans under a Life Insurance Policy other than a Variable Life Insurance Policy. If you hold a life insurance policy that is not a variable life insurance policy, you will not be allowed to receive surrender payments, withdrawals or policy loans.
    5. Other Benefits. If your insurance policy has other optional benefit riders or features that are funded by a Guaranteed Account, such as a Guaranteed Minimum Withdrawal Benefit, Guaranteed Minimum Income Benefit, or Guaranteed Minimum Accumulation Benefit, you may access value provided by those optional benefits to the extent funded by the Separate Account. You will continue to receive Recurring Periodic Payments or other features funded by a Guaranteed Account subject to the limitations described in Section IV.
    6. Transfers and Reallocations. You will be permitted to reallocate investments within the Separate Account investment options subject to policy terms and conditions. You will not be permitted to reallocate investments from Guaranteed Account investment options to Separate Account investment options or vice versa during the Interim Period. You will not be permitted to reallocate investments within the Guaranteed Accounts to other Guaranteed Account investment options.

  3. ANNUITIES
    1. Receiving Your Recurring Periodic Payments Funded by the Separate Account. If you have a variable annuity and are receiving Recurring Periodic Payments funded by the Separate Account as of the Petition Date, you will continue to receive Recurring Periodic Payments.
    2. Receiving Your Recurring Periodic Payments Funded by a Guaranteed Account. If you are receiving Recurring Periodic Payments funded by a Guaranteed Account as of the Petition Date, you will continue to receive payments out of the applicable Guaranteed Account subject to the limitations described in Section IV. You may not make changes to the amount or frequency of the Recurring Periodic Payments.
    3. Electing Recurring Periodic Payments Under your Variable Annuity. If you have a variable annuity and are not currently receiving Recurring Periodic Payments, you may elect variable annuity payment options funded from the Separate Account but you may not elect annuity payment options from a Guaranteed Account.
    4. Electing Recurring Periodic Payments Under your Deferred Annuity other than a Variable Annuity. If you have an annuity that is not a variable annuity and are not currently receiving Recurring Periodic Payments, you may not elect to commence Recurring Periodic Payments. You will be permitted to receive Required Minimum Distributions in accordance with the terms of the annuity.
    5. Surrenders, Withdrawals and Loans under a Variable Annuity. If you have a variable annuity, you will be allowed to exercise surrender, withdrawal and loan options under your annuity to the full extent of the Separate Account value attributable to your annuity. If you also allocated amounts to one or more Guaranteed Account investment options, you will not be allowed to access that value through surrender, withdrawals or policy loans.
    6. Surrenders, Withdrawals and Loans under an Annuity other than a Variable Annuity. If you have an annuity that is not a variable annuity, you will not be allowed to receive surrender payments, withdrawals or policy loans but will be permitted to receive Required Minimum Distributions in accordance with the terms of the annuity.
    7. Death Benefits Under a Variable Annuity. If you have a variable annuity that so provides, a death benefit may be paid, in accordance with the terms of your annuity, to the full extent of the Separate Account value attributable to your annuity. In addition, if the amount of the death benefit payable under your annuity exceeds any Separate Account value receivable by you under your annuity, which means that such further death benefit would be funded by a Guaranteed Account, then such further death benefit may be paid in an amount equal to the lesser of (x) the unpaid guaranteed amount of such benefit or (y) $250,000 less the amount of previous payments out of a Guaranteed Account on such annuity after the Petition Date.
    8. Death Benefits Under a Deferred Annuity other than a Variable Annuity. If you have an annuity other than a variable annuity, death benefits equal to the lesser of (x) the amount of death benefits payable under the annuity or (y) $250,000 less the amount of previous payments out of a Guaranteed Account on such annuity after the Petition Date, will be paid subject to the terms of the annuity.
    9. Receiving a Lump Sum Under Your Annuity. If you are currently receiving fixed annuity payments and become entitled to a lump sum payment under your annuity due to a triggering event (such as the death of the annuitant), the lump sum payment will be made in accordance with the terms of the annuity, but any amounts funded by a Guaranteed Account will be limited to $250,000 less the amount of previous payments out of a Guaranteed Account after the Petition Date.
    10. If your Variable Annuity Reaches Maturity During the Interim Period. If you have a variable annuity that reaches maturity during the Interim Period, you may elect surrender or annuitization options from the Separate Account only. You may not elect surrender or annuitization options from a Guaranteed Account.
    11. If your Deferred Annuity other than a Variable Annuity Reaches Maturity During the Interim Period. If you have an annuity other than a variable annuity that reaches maturity during the Interim Period, you may not elect surrender or annuitization options but will continue to accumulate value pursuant to the crediting rate and terms of the annuity as if it had not reached maturity.
    12. Transfers and Reallocations. You will be permitted to reallocate investments within the Separate Account investment options subject to policy terms and conditions. You will not be permitted to reallocate investments from Guaranteed Account investment options to Separate Account investment options or vice versa during the Interim Period. You will not be permitted to reallocate investments within the Guaranteed Accounts to other Guaranteed Account investment options.

  4. AGGREGATE LIMIT
    1. Life Insurance Policies Covering One Individual. No Guaranteed Account will individually or together pay more than $300,000 in the aggregate under one or more life insurance policies covering one individual regardless of who owns the policies or the number of beneficiaries.
    2. Annuities Covering One Annuitant. No Guaranteed Account will individually or together pay more than $250,000 in the aggregate under one or more annuities covering one annuitant regardless of who owns the policies or the number of beneficiaries.
    3. Life Insurance Policy and Annuity Covering One Individual. No Guaranteed Account will individually or together pay more than $300,000 in the aggregate for benefits under one or more life insurance policies and one or more annuities covering any one individual regardless of the number and size of policies of life insurance and annuities covering that individual and regardless of who owns the policy or annuity or the number of beneficiaries.
    4. Allocation of Benefits Under Multiple Policies. If multiple policies covering one individual have an aggregate amount of life insurance death benefits in excess of $300,000, annuity payments in excess of $250,000, or a combination of life insurance death benefits and annuity payments in excess of $300,000, as applicable, funded by one or more Guaranteed Accounts, the Rehabilitator will determine the allocation of amounts to be paid under each policy.