New York Judge Approves Columbian Mutual Life's Rehabilitation Order
A rehabilitator can try to get an insurer back on its feet, rather than liquidating it.
A New York state judge has approved an order putting Columbian Mutual Life Insurance Company in rehabilitation.
The Binghamton, New York-based life insurer, founded in 1882, has about 700,000 life insurance policies and annuity contracts in force. Inaccurate mortality assumptions and the collapse of an effort to sell the company left it short on capital, according to documents that state regulators filed with the court.
Regulators reported that the company ended 2023 with $1.4 billion in admitted assets and is about $104 million short of the capital it needs to meet New York standards.
Illinois put an affiliated company, Columbian Life Insurance Company, in rehabilitation Aug. 1.
Columbian has been active in the preneed insurance and final expense insurance markets. It has sold its products through independent agents and brokers.
The rehabilitation process gives the rehabilitator a chance to try to sell a company, find investors or use other methods to get a struggling company back on its feet. New York regulators have not announced any plans to liquidate Columbian.
In a notice to policyholders, Columbian emphasized that its policies remain in place.
“You do not need to take any special action or file anything additional at this time with respect to your policy or claim,” according to the notice. “Claims for policy benefits will continue to be processed and paid in the normal course of business.”
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