Monday, November 25, 2013

No. 10: The Danger of Announcing Dividend Interest Rates

I have expressed the opinion that announcing dividend interest rates associated with traditional participating life insurance policies is a deceptive sales practice. Also, I have expressed the opinion that announcing gross interest rates associated with universal life policies is a deceptive sales practice. For example, see "How Not To Advertise Universal Life" in the May 1984 issue of The Insurance Forum.

MassMutual's Press Release
On November 4, 2013, MassMutual issued a two-page, seven-paragraph press release entitled "MassMutual Approves Record $1.49 Billion Dividend Payout for Policyowners." The release contains three footnotes and some descriptive material entitled "About MassMutual." The lead paragraph of the release reads:
Massachusetts Mutual Life Insurance Company (MassMutual) announced today that its Board of Directors has approved the company's largest dividend payout ever in the company's history for 2014: a record payout estimated at $1.49 billion to eligible participating policyowners. The dividends to be paid in 2014 reflect a dividend interest rate1 of 7.10 percent for eligible participating permanent life and annuity blocks of business, an increase over last year's rate of 7.00 percent.
A footnote is indicated after the words "dividend interest rate" in the above lead paragraph. The footnote reads:
The dividend interest rate is not the rate of return on the policy. Dividends consist of an investment component, a mortality component and an expense component. Therefore, dividend interest rates should not be the sole basis for comparing insurers or policy performance. Additionally, dividends for a given policy are influenced by such factors as policy series, issue age, gender, underwriting class, policy year and policy loan rate, as well as changes in experience.
The footnote says what the dividend interest rate is not, but does not say what it is. Further, saying dividend interest rates should not be the sole basis for comparisons implies they are a basis for comparisons.

A Brokerage E-mail
On November 5, a MassMutual brokerage office in Georgia sent an e-mail to producers. The subject is "MassMutual Announces 2014 Dividend." The title, in large boldface type, is "7.10% Dividend Announced." Here is the full text, except for contact information:
MassMutual has officially announced our 2014 dividend. We will payout [sic] a record $1.49 Billion. The dividend interest rate is 7.10%. Please see attachment for official news release.
The full press release, including its three footnotes, was attached to the e-mail. A recipient of the e-mail shared it with me.

Another Brokerage E-mail
On November 12, a MassMutual brokerage office in Indiana sent an e-mail to producers. The subject is "2014 Dividend Announcement," and there is no title. The third paragraph of the five-paragraph text includes this sentence: "Additionally, a 7.10% dividend interest rate1 represents a 10 basis point increase for all participating permanent life and annuity blocks of business (from 7.00% to 7.10%)." [The boldface type is in the original.] Footnote 1 is shown at the bottom of the e-mail in exactly the form shown in the company's press release. A recipient of the e-mail shared it with me.

A Newspaper Article
On November 4, an article appeared in The Republican, a newspaper in MassMutual's home city of Springfield, based on the press release. The title is "MassMutual announces record dividend estimated at $1.49 billion." Here are the first two sentences of the text:
MassMutual Financial Group has approved the insurer's largest dividend payout in history for 2014. The record payout to eligible policy holders is estimated at $1.49 billion. The dividends to be paid in 2014 reflect a dividend interest rate of 7.1 percent for eligible policy holders, an increase over last year's rate of 7 percent flat.
The article does not mention anything that appears in footnote 1 of the press release. Thus it does not warn the reader against drawing the inference that 7.1 percent is a policy rate of return or that the figure may be used for comparison purposes.

My Inquiry and MassMutual's Statement
I contacted a MassMutual spokesman, explained my concerns, said I was planning to post an article, and requested a statement from the company to include in the article. In response, the company said:
Based on the information you shared, the initial e-mail message that you forwarded is accurate and links through appropriately to our news release with full disclosures. Regarding your latter question on a news story, although our release cited full disclosures, we cannot dictate what a news organization includes in its coverage.
I am more concerned about what producers say to policyholders and prospects than what MassMutual says to producers. I think producers, in their sales work, and especially in the current environment of low market interest rates, will emphasize the 7.10 percent dividend interest rate in such a way as to imply that it is the rate of return on the policy, and that it may be used for comparison purposes. Thus I think the figure will be used in such a way as to constitute a deceptive sales practice. For these reasons, it is my opinion that companies should not announce dividend interest rates, even with cautionary footnotes.

I have long argued for a rigorous system of disclosure to life insurance consumers. Among other things, the system includes information about yearly rates of return on the savings component of cash-value life insurance, and reflects the combined effect of interest, mortality, and expenses. My most complete description of the system is in the December 1975 issue of the Drake Law Review. I am making the 26-page article available as a complimentary PDF. Just e-mail me a request for the Drake Law Review article.

Thursday, November 21, 2013

No. 9: The Unsealing of Some Phoenix Court Documents

I have written extensively about cost-of-insurance (COI) increases that subsidiaries of Phoenix Companies, Inc. imposed on owners of universal life policies of the type used in stranger-originated life insurance transactions. I discussed five federal court lawsuits. I also discussed investigations of the "2010 increase" by what is now the New York State Department of Financial Services (DFS), the California Department of Insurance (CDI), and the Wisconsin Office of the Commissioner of Insurance (OCI).

Phoenix rescinded the 2010 increase imposed on New York policyholders after DFS ordered the company to do so. Phoenix later imposed the "2011 increase" on New York policyholders, apparently without objection by DFS. Numerous important court documents relating to the COI increases have been sealed or heavily redacted, but I am continuing my efforts to obtain them. My June 2012 public records request to DFS remains pending. Although my public records request to CDI was denied, I obtained some documents through a public records request to OCI. See the October 2012, December 2012, and November 2013 issues of The Insurance Forum

The September 2011 DFS Letter to Phoenix
On September 6, 2011, Michael Maffei, chief of the life bureau of DFS, sent a three-page letter to Kathleen McGah, vice president and counsel of Phoenix. He described the results of the DFS investigation into the 2010 increase and alleged that Phoenix committed five violations of New York insurance laws. He ordered Phoenix to reduce the COI rates to the rates used prior to the 2010 increase; credit the difference, with interest, to policy values; and refrain in the future from using the "funding ratio" (the ratio of a policy's accumulated value to the policy's face amount) as a basis for COI increases. The Maffei letter remains sealed in court files, but I obtained it through my August 2013 public records request to OCI. I am making the letter available as a complimentary PDF. Just e-mail me a request for the Maffei letter. 

The Mills Reports
Robert Mills is an economist and director at Micronomics, Inc., an economic research and consulting firm. The plaintiffs' attorneys retained him to calculate damages in the event Phoenix is found liable for breach of contract as alleged in court complaints.

On September 16, 2013, Mills submitted a report based on data provided by Phoenix. On September 30, he submitted a supplemental report based on additional data provided by Phoenix. The reports were sealed pursuant to a protective order. On November 6, they were unsealed. The figures below are from the supplemental report.

Mills focused on the 2011 increase Phoenix imposed on New York policyholders. He said owners of 87 policies were affected by the 2011 increase, and 55 of them remained in force as of June 30, 2013. The total estimated COI overcharges for the 55 policies was $1,517,849 through August 30, 2013, and that figure will increase over time. Mills also estimated prejudgment interest (through March 31, 2014 on estimated overcharges through August 30, 2013) of $172,277 at a 9 percent interest rate (the statutory rate in New York) or $76,568 at a 4 percent interest rate (the rate Phoenix argues should be used).

Mills discussed 22 policies that lapsed between notification of the 2011 increase and June 30, 2013. He estimated that $7.95 million in premiums were paid into those policies. He also gave some lower damages figures based on the assumption that a small percentage of the policies lapsed for reasons other than the 2011 increase.

Two Important Unanswered Questions
After their investigations, CDI and OCI ordered Phoenix to rescind the 2010 increase imposed on policyholders in those states, but Phoenix refused to do so. Question: Why did Phoenix refuse to comply with the CDI and OCI orders to rescind the 2010 increase imposed on California and Wisconsin policyholders after having complied with the DFS order to rescind the 2010 increase imposed on New York policyholders? OCI began an administrative proceeding, the results of which will not be known for some months. To my knowledge, CDI has done nothing further.

Although DFS ordered Phoenix to rescind the 2010 increase, DFS apparently did not object to the 2011 increase. Question: How did Phoenix implement the 2011 increase on New York policyholders in such a way as to avoid the problems that caused DFS to order rescission of the 2010 increase? Hopefully the question will be answered when further court documents are unsealed or DFS complies with my public records request.

Other Documents
Numerous court documents relating to Phoenix's COI increases remain sealed, and I still await numerous documents in response to my public records request to DFS. When more documents become available, I will report on them.

Thursday, November 14, 2013

No. 8: More on the Reversal of the Neasham Conviction

In No. 6, I discussed the reversal of the conviction of Glenn Neasham, a California agent who sold an Allianz annuity to Fran Schuber in 2008, just before her 84th birthday. An important issue was whether Schuber was suffering from dementia at the time of the sale. A reader expressed some thoughts about my posting, and we engaged in further correspondence. The exchange prompts me to elaborate on three points.

The $14,000 Commission
The first point relates to Neasham's $14,000 commission, which I view as an appropriation of Schuber's funds to Neasham's use. The reader asked whether I am opposed to commissions. I said I am not. I have often said commissions are essential in situations where financial services are sold rather than bought. The consumer's tendency is to procrastinate, and someone must perform what I call the "anti-procrastination function." A person has to be paid to perform that function, and commissions are a reasonable form of compensation. I have often said many people die without wills because no one is paid to perform the anti-procrastination function.

I failed to make sufficiently clear in my previous posting that the annuity in question was not a single-premium annuity, but rather a flexible-premium annuity in which the first premium was large and no further premiums were contemplated. The first-year commission rate on a flexible-premium annuity is significantly higher than the commission rate on a single-premium annuity. In other words, I think the annuity sold in this case generated an excessive commission.

Jochim's Financial Interest
The second point relates to the financial interest of Louis Jochim, Schuber's 82-year-old live-in boyfriend, who precipitated the sale by bringing Schuber to Neasham's office. The reader said the question of Jochim's financial interest in the sale had nothing to do with Neasham. In response, I said it had everything to do with Neasham. In my opinion, the purpose of the sale was to allow Jochim--rather than Schuber's son Ted--to take eventual control of Schuber's property.

As described in my June 2012 article, Jochim's plan was thwarted. After Neasham's conviction, and after Allianz refunded the entire annuity premium to Schuber with interest, Ted obtained a court order. It designated Ted the conservator of Schuber's person and property. Jochim moved out of Schuber's house, and Ted moved her to the memory loss unit of an assisted living facility.

The Suitability Issue
The third point relates to suitability of the annuity. As I said in No. 6, the fact that the California Department of Insurance had approved the annuity contract form for sale to persons up to age 85 does not mean it is necessarily suitable. The reader said he sees no problem with an annuity that provides a period certain. In my view, when a person selects an annuity consisting of a period certain and a deferred life annuity, the arrangement would not be suitable for a person in poor health because the portion of the funds going to the purchase of the deferred life annuity would be forfeited entirely if the person dies during the period certain.

Wednesday, November 13, 2013

No. 7: John Grisham Strikes Again

John Grisham, one of our most popular novelists, has done it again. His latest book is Sycamore Row (Doubleday, 2013). It is set in 1988 in the fictional Mississippi town of Clanton. It involves many of the characters in his first book, A Time to Kill, which was set in 1985.

Seth Hubbard, a white man in his 60s, is dying of lung cancer and commits suicide by hanging himself from an old sycamore tree. He leaves a suicide note containing instructions about his funeral, a letter to Jake Brigance, the attorney hero of Grisham's first book, and a handwritten will executed the day before he committed suicide.

The handwritten will revokes Hubbard's previous will, which was of the usual type prepared by a law firm. The handwritten will disinherits Hubbard's two adult children, their children, and his two ex-wives. It leaves the bulk of his estate, which turned out to be large, to his black housekeeper, with relatively small bequests to a church and a long lost brother. The housekeeper had been with Hubbard for three years and had cared for him during his difficult final days. The handwritten will names the executor and instructs him to appoint Jake the attorney for the estate. The letter to Jake instructs him to carry out the terms of the handwritten will "at all costs," and warns there will be a big fight. The letter to Jake includes these sentences: "The doctors have given me only weeks to live and I'm tired of the pain.... If you smoke cigarettes, take the advice of a dead man and stop immediately."

Hubbard was correct about the fight. All through the book I wondered whether the second word of the title was "row," rhyming with "grow," or whether it was "row," rhyming with "brow." At the end of the book we learn there was a row (rhyming with grow) of sycamore trees of which the hanging tree was a remnant. However, the legal war that ensued certainly qualified as a row (rhyming with brow).

I have read all of Grisham's books, and I think this one may be his best yet. It is 447 pages but is a page-turner.

Thursday, October 31, 2013

No. 6: Reversal of the Neasham Conviction and Some Lessons To Be Learned from the Case

I devoted the entire eight-page June 2012 issue of The Insurance Forum to the conviction of Glenn Neasham, a California agent who sold an annuity to Fran Schuber in February 2008, shortly before her 84th birthday. The annuity was a "MasterDex 10 Annuity" or "Flexible Premium Deferred Annuity Policy with an Index Benefit" issued by Allianz Life Insurance Company of North America. An important issue in the case was whether Schuber was suffering from dementia at the time of the sale.

The Sale
The sale of the annuity occurred three days after Louis Jochim, Schuber's 82-year-old boyfriend, brought her to Neasham's office. Jochim was living with Schuber in her home, and he had bought such an annuity from Neasham several years earlier. Jochim was named the primary beneficiary of Schuber's annuity, and Jochim's daughter was named the contingent beneficiary. Schuber's son, who Jochim claimed was estranged from Schuber, was not named a beneficiary. The first-year premium for the annuity was $175,000, and no further premiums were contemplated. The funds were taken from a maturing certificate of deposit owned by Schuber.

When Jochim brought Schuber to the bank to obtain a check payable to Allianz for the $175,000 premium, bank employees were concerned that Schuber did not understand what she was doing. They issued the check, but filed a report of possible elder financial abuse. The report led to investigations by the Lake County Adult Protective Services, the California Department of Insurance (CDI), and the Lake County District Attorney.

The Trial and the Appeal
In December 2010, criminal charges were filed against Neasham and he was arrested. In October 2011, after a ten-day trial in the Lake County Superior Court, the jury found Neasham guilty of felony theft with respect to the property of an elder and dependent adult. Neasham was sentenced to 90 days in the Lake County jail. The sentence was stayed pending appeal.

Neasham appealed his conviction to the California Court of Appeal. On October 8, 2013, a three-judge panel reversed the conviction. Justice Stuart Pollak wrote the opinion. Justices William McGuiness and Matthew Jenkins concurred. (The People v. Neasham, Court of Appeal, State of California, First Appellate District, Division Three, Case No. A134873.)

My Observations
I agree with the appellate panel's finding that one of the trial court judge's jury instructions was incorrect. The instruction failed to make clear that the jury had to find not only that the defendant committed theft but also that the defendant intended to commit theft. However, I doubt the jury verdict would have been different if the instruction had been correct.

I disagree with--and am surprised by--at least six of the appellate panel's findings. First, the panel said "there was no evidence that [Neasham] appropriated [Schuber's] funds to his own use or to the benefit of anyone other than [Schuber]." Although the panel mentioned Neasham's 8 percent commission (amounting to $14,000), the panel did not consider it an appropriation of Schuber's funds to Neasham's benefit. I disagree. Also, although the panel mentioned surrender charges generally, the panel did not mention the first-year surrender charge of $19,578.

Second, the panel said there was no evidence that Neasham "made any misrepresentations or used any artifice in connection with the sale." The panel ignored the "Annuity vs. CD" form the CDI had found misleading. For a detailed description of the form, see my June 2012 article.

Third, the panel found persuasive the fact that the CDI had approved the annuity contract form for sale to persons up to age 85. Yet the fact that a contract form is approved by a regulator does not mean it is suitable. I am reminded of a case where a woman with advanced emphysema converted her $1.3 million retirement accumulation, virtually her entire estate, to a straight life annuity with no refund. Her illness resulted in her death six months later. The annuity was an approved contract form but surely was not suitable. See "An Unsuitable Life Annuity from TIAA" in the January 2010 issue of The Insurance Forum.

Fourth, the panel accepted the idea that it was appropriate for Jochim to be the primary beneficiary of the annuity and for his daughter to be the contingent beneficiary. The panel also referred to Schuber's son as "largely estranged," a characterization Jochim used. Yet Jochim had a strong financial interest in promoting the so-called estrangement.

Fifth, the panel said there was "conflicting evidence as to [Schuber's] ability to understand the nature of the transaction." Jochim and Neasham's office assistant said Schuber knew what she was doing, but I think the panel should have given much more weight to comments by the bank employees, the various investigators, and Schuber's son.

Sixth, the panel gave significant weight to the "CYA" letter Neasham had handwritten. I think the letter should have been given no weight. Although Schuber and Jochim signed it, no one else witnessed it.

Lessons To Be Learned
It is natural for insurance agents to feel relieved by the reversal of Neasham's conviction. The case attracted so much attention that the Society of Financial Service Professionals submitted an amicus brief to the appellate court on Neasham's behalf. Yet the case ruined Neasham: the CDI revoked his agent's license, the legal expenses were enormous, and he was forced to accept financial help from friends. Moreover, the case provides important lessons for agents and insurance companies who deal with elderly prospects.

First, it is important to examine a prospect's estate planning documents, such as a will, a power of attorney (POA), a living will, and the appointment of a health care representative. For example, if there had been a POA in this case, it would have been appropriate to consult with the holder of the POA. As I said in my June 2012 article, Schuber had asked a lawyer to prepare a POA years before the purchase of the annuity. However, the lawyer felt Schuber was not legally competent to execute a POA and therefore refused the assignment.

Second, it is important for the agent to be diligent about whether the prospect is cognitively impaired. It requires neither medical training nor rocket science to ask the prospect to count backward from 20 or to ask a few routine questions: What year is this? What day of the week is this? What are the names of your brothers and sisters? What is your spouse's name? What are the names of your children? How many grandchildren do you have? Who is the President of the United States? In the Schuber case, nine months after the sale, she told an investigator her husband had bought the annuity, when in fact her husband had died in the 1980s.

Third, it is important for the agent to bring the prospect's family into the picture. In this case, Jochim, who was not a family member and was not a disinterested party, seemed to be the only one present and seemed to answer all the questions for Schuber in discussions with Neasham, with the bank employees, and later with the investigators.

In short, an agent should not make a sale unless the agent is convinced that the product is suitable for the prospect. Further, the agent should not sell an annuity with life contingencies unless the agent is convinced that the prospect is not suffering from a cognitive impairment or other major illness affecting life expectancy. To sell an unsuitable product or deal with a cognitively impaired prospect is asking for trouble.

Wednesday, October 30, 2013

No. 5: The Conviction of Three STOLI Promoters on Federal Criminal Charges

In the May 2012 and April 2013 issues of The Insurance Forum, I discussed the federal criminal charges filed against three promoters of stranger-originated life insurance (STOLI). The defendants are Michael Binday (Scarsdale, NY), James Kevin Kergil (Peekskill, NY), and Mark Resnick (Orlando, FL). (U.S.A. v. Binday et al., U.S. District Court, Southern District of New York, Case No. 1:12-cr-152.)

The Charges
Each defendant was charged with three criminal counts: (1) conspiracy to commit mail fraud and wire fraud, (2) mail fraud, and (3) wire fraud. Kergil and Resnick were charged with a fourth count: conspiracy to destroy records and obstruct justice. Binday initially was charged with one count of obstruction of justice, but U.S. District Court Judge Colleen McMahon dismissed that count in December 2012.

The indictment described five areas where information provided to the companies was alleged to be false: applicants' finances, intent to sell the policies in the secondary market, third-party premium financing, purpose of the insurance, and existence of other policies or applications. The indictment also described four ways in which insurance companies are harmed when they are tricked into issuing STOLI policies: "earlier and greater payout of death benefit," "less premium income," "providers' financial projections rendered unreliable," and "delayed payments causing decreased cash flow."

Trial and Conviction
The trial originally was scheduled to begin on April 8, 2013. However, Judge McMahon delayed it more than five months after an extraordinary development that I discuss below.

Jury selection began on September 17, and there were 11 trial days. On October 7, at 2:25 p.m., the jury began its deliberations. It reached its verdict 15 minutes later. It found the defendants guilty on all counts. Judge McMahon scheduled sentencing for January 15, 2014.

An Extraordinary Development
Binday was represented by Steptoe & Johnson, a major law firm. The lead attorney was Michael Miller. On February 27, 2013, Miller wrote a letter informing Judge McMahon of "a recent development concerning a potential conflict of interests matter and the measures we have taken to address it." He also said: "We do not believe that an adjournment of the trial will be necessary."

On March 7, one month before the trial date, Miller wrote another letter to Judge McMahon. He said: "Regrettably, I write to apprise the Court that my firm believes it is required by Rule 1.16(b) of the New York Rules of Professional Conduct to move to withdraw from the representation of Mr. Binday in his pending case before Your Honor." He said the rule "provides that a lawyer and/or law firm must withdraw from further representation of a client if the lawyer knows that continued representation will violate other ethics Rules." He also said:
When my firm was first retained, we were aware that several of the purported "victim" insurance companies identified in the Indictment were clients of my firm in connection with matters which appeared at the time to be wholly unrelated to the transactions underlying the defendant's supposed conduct in this case.... Some time later, other issues arose and, upon my firm's recommendation, conflict counsel was retained at my firm's expense who would cross-examine at trial any Government witness who is currently, or was previously, employed by an insurance company that is also being represented by my firm in other matters....
Miller had been arguing that Binday was not guilty because the representations in STOLI applications were not material to the companies' decisions to issue the policies. Several companies subpoenaed in the case were moving to quash or modify the subpoenas. Moreover, a major Steptoe client (not identified) said it might terminate its business relationship with Steptoe if Steptoe continued to represent Binday.

(It is likely that the mystery client is Metropolitan Life. One of the subpoenaed companies was MetLife Investors USA, a Metropolitan affiliate. According to public filings, Metropolitan paid Steptoe $14.7 million in 2009, $14.6 million in 2010, $14.3 million in 2011, and $15.4 million in 2012.)

Binday did not consent to Miller's withdrawal. However, he retained Andrew Lankler of Lankler, Carragher & Horwitz as "conflicts counsel."

On March 11, the defendants and all the attorneys met with Judge McMahon in camera (in private in the judge's chambers). On March 14, Judge McMahon issued an order granting Miller's motion to withdraw and requiring Steptoe to (1) return to Binday "every penny he has ever paid to the firm, with interest," (2) continue paying for the services of Lankler until Binday decides to retain Lankler or Lankler's services are no longer required, and (3) cooperate at Steptoe's expense with the new attorney's investigation of the case. Judge McMahon also postponed the trial until September 17. Here is the beginning of Judge McMahon's order (citations omitted, and "in chancery" means "in litigation"):
Virtually on the eve of trial, the law firm of Steptoe and Johnson, counsel for defendant Michael Binday, have petitioned the court for permission to withdraw due to what it has concluded is an unwaivable conflict of interest. After consulting with the firm, both in open court and in an in camera session, I have reluctantly reached the conclusion that Steptoe must be relieved. This will result in the postponement of an imminent trial for three defendants--a particularly painful result for the men who are in chancery, for the Government, and for the court, which calendared this case long ago. However, on the record before me, the presumption in favor of a defendant's choice of counsel has been overcome by "a showing of a serious potential for conflict."
I am providing a complimentary 16-page PDF consisting of Miller's two letters and Judge McMahon's order. Click here to open the PDF.

Monday, October 21, 2013

No. 4: Metlife's Incomplete Explanation about Runs

Steven A. Kandarian is chairman, president, and chief executive officer of MetLife, Inc. (NYSE:MET). On August 1, 2013, during the firm's second quarter earnings conference call, he explained why he thinks the company should not be designated a "systemically important financial institution." I am not suggesting whether or not the company should be so designated, but I think his explanation was incomplete.

Mr. Kandarian said the long-term nature of a life insurance company's liabilities "protects against bank-like runs and the need to sell assets quickly." Regarding products with a savings component, he said "there are strong disincentives to surrender and cash out." He mentioned surrender charges, tax penalties, and the fact that new policies need to be underwritten. He also said insurance regulators "have the ability to halt surrenders in the event of financial distress, and have typically done so." 

Everything Mr. Kandarian said is accurate, but there are at least two important points he did not mention. First, policy loans are important, as evidenced by the potentially fatal runs experienced by several large companies because of low fixed policy loan interest rates when market interest rates spiked in 1981. New policies issued today usually have variable loan interest rates, but many have fixed maximum rates and many old policies with low fixed rates are still in force. 

Second, when insurance regulators step in, the reverberations can be widely felt. Regulators did indeed intervene to stop runs at companies such as Executive Life and Mutual Benefit Life, but many policyholders of those companies suffered significant losses.