PHL Website FAQ – Top Policyholder Questions
March 11, 2025
- I received a notice in the mail about PHL or read a press release about PHL. What does this mean?
On May 20, 2024, PHL Variable Insurance Company and its subsidiaries, Concord Re. Inc. and Palisado Re (collectively, “PHL”), entered into rehabilitation proceedings in the Connecticut Superior Court. After exploring other alternatives, the Connecticut Insurance Department (“CID”), PHL’s state regulator, determined that PHL is in a hazardous financial condition and that rehabilitation proceedings are in the best interest of policy and annuity holders. Significantly, PHL consented to the rehabilitation.
As part of the proceedings, the Court has entered an order imposing a “moratorium” on certain policy and annuity payments and transactions. This means that during the rehabilitation proceeding, some policy or annuity holders may not be able to get the full amount of benefits or engage in certain transactions under their policy or annuity.
The notice policy and annuity holders received in the mail (available here) describes how each product type is treated under the moratorium. Benefits under most products are not affected. Despite the Moratorium, policy and annuity holders must continue to pay premium for their policies and annuities during the rehabilitation. - What is a rehabilitation proceeding? What is the goal of a rehabilitation proceeding?
Rehabilitation is a Court-approved, organized process to help a company recover from financial distress. In this instance, the Connecticut Insurance Commissioner will operate PHL under Court supervision as the appointed Rehabilitator throughout the case rather than PHL’s management.
The goal of the proceeding is to develop a plan of rehabilitation that maximizes the value of PHL’s assets and equitably administers the PHL business for the benefit of all policy and annuity holders. A plan may include movement of policies to a stronger insurance company, an offer to policyholders of a choice among policy modifications or buyouts, and other alternatives. The Rehabilitator is continuing its development of the plan, which must then be approved by the Court. - How long will this go on?
The Rehabilitator expects to develop a rehabilitation plan and submit it to the Court for approval by mid-2025. That is just an estimate, and it could take longer. Once approved by the Court, implementation of a rehabilitation plan may take six or more months. - How does a rehabilitation differ from a liquidation?
At this time, the Rehabilitator believes that he will be able to develop a rehabilitation plan that will give policy and annuity holders better treatment than they would receive in a liquidation. For context, in liquidation, a company’s business is wound down and its assets are liquidated. - Will PHL be liquidated?
At this time, there is no plan to liquidate PHL. The Rehabilitator believes that a rehabilitation plan can be implemented that will provide policy and annuity holders better treatment than they would get in a liquidation. - What is going to happen to my policy during the rehabilitation proceeding?
How your policy or annuity will be treated depends on the type of policy or annuity you have and the level of benefits it provides. As part of the rehabilitation, a moratorium has been implemented. For most policy and annuity holders, the moratorium will not have any immediate effect on recurring payments and death benefits, specifically:
- If a policyholder is currently receiving regular periodic annuity payments, guaranteed lifetime withdrawal benefits or systematic withdrawals, they will continue to receive regular periodic payments.
- If a policyholder has a non-variable life insurance policy that provides death benefits of $300,000 or less, the policy beneficiary will be paid in full unless there are other life insurance policies and annuities covering the same individual.
- If an annuity holder has a non-variable annuity that provides death benefits of $250,000 or less, the specified beneficiary will be paid in full (less any payments received during the moratorium period) unless there are other PHL-issued life insurance policies or annuities covering the same individual.
The moratorium summary that policy and annuity holders received in the mail (available at https://portal.ct.gov/cid/phl/phl-in-rehabilitation) describes in detail the treatment of different types of policies and annuities. - Under the moratorium, can I move my investments from one account to another?
If you have a variable annuity or variable life insurance policy, you may move investments from one variable account option to another variable account option, subject to policy terms and conditions. You may not re-allocate investments from a variable account option to any other account option, or vice versa. You also may not re-allocate investments within a guaranteed account. - Under the moratorium, can I surrender my policy or take a loan against it? How are matured annuities going to be handled? Will I be able to surrender my policy or elect to annuitize upon maturity?
For variable annuities or life insurance products, you will be allowed to exercise surrender, withdrawal and loan options under your policy or annuity to the full extent of the Separate Account value attributable to your policy or annuity. If you have value in one or more Guaranteed Account investment options, you will not be allowed to access that value through surrender, withdrawals or policy loans. You may also elect surrender or annuitization options from the Separate Account only. You may not elect surrender or annuitization options from a Guaranteed Account.
For non-variable annuity or life insurance products, you will not be allowed to receive surrender payments, withdrawals or policy loans, but you will be permitted to receive Required Minimum Distributions in accordance with the terms of an annuity.
More information can be found within the moratorium summary. - What can I do if the moratorium restrictions on my policy or annuity present a hardship to me?
If the moratorium limitations and restrictions on your policy or annuity present a hardship to you, there is a procedure to apply to the Rehabilitator for an exception that, if granted, will permit payment of benefits despite such limitations and restrictions. The Hardship Request for Exemption from Moratorium is available on our website or can be mailed upon request. All Hardship Requests must include all required information and be mailed to the Rehabilitator or uploaded to the Rehabilitator’s portal as described in the request form. There is no assurance that a request will be granted, but each request will be carefully reviewed and considered by the Rehabilitator’s staff. - Where can I go for more information or if I have additional questions?
For additional support and information around the rehabilitation, you may call 1-877-800-2445. The call center is open Monday through Friday, 9am - 5:30pm ET. Please have your policy number(s) available so we can better assist you.
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Please click here if you have questions related to the November 2024 Status Report.