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April 22, 2014

Executive Life Insurance Company of New York (ELNY) Appeal Denied, Further Appeal Sought

The long ELNY saga continues, at least for the time being, with two recent developments.

First, in a decision dated February 6, 2013, the Supreme Court of the State of New York, Appellate Division found that ELNY payees who had appealed the trial court’s April 16, 2012 Order of Liquidation and Approval of the ELNY Restructuring Agreement had not been denied due process during the trial court proceedings, and that there was no merit to their contention that the trial court lacked jurisdiction to grant the New York Superintendent of Financial Services (Superintendent) judicial immunity and injunctive relief.

Then, on March 8, 2013, the payees filed a Motion for Leave to Appeal to the New York State Court of Appeals (Motion), seeking a reversal of the Appellate Division’s decision. The return date on the Motion, which is the date by which any answering papers must be served and filed with the Court of Appeals, is March 25, 2013. Because the closing of the Restructuring Agreement is conditioned upon the absence of a pending appeal challenging the Restructuring Agreement, the filing of the Motion creates uncertainty as to when closing may occur.

While the trial court ordered the Superintendent to continue to direct the full payment of all benefits under all ELNY annuities until the closing of the Restructuring Agreement, many ELNY annuity owners want to know what they can do to protect their interests in connection with the approximately 1,500 ELNY annuities that ultimately are expected to have shortfalls (meaning less than the full amount of the annuity payments would be covered under the Restructuring Agreement), and when they need to do it. A significant issue in this regard is Schedule 1.15 to the Restructuring Agreement, which sets forth in detail the amount of benefits that would be allocated to each of the ELNY annuities, and the amount of the shortfalls on which annuity owners would be exposed. The Superintendent filed the original version of Schedule 1.15 in November, 2011, but it has not yet been finalized. To the extent annuity owners understand the amount to which they are entitled under the various guaranty association acts, annuity owners can compare that amount with the amount of the benefits allocated under the Restructuring Agreement.

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About the Author

Partner

Michael Miller has been assisting clients in connection with insurance, environmental, business, and intellectual property issues for approximately twenty years. Michael is a trial lawyer who has litigated and tried cases before judges and juries in state and federal courts across the country. Michael also assists clients with transactional matters, including complex insurance and annuity issues and complex environmental risk transfer issues.

Insurance Litigation.  Michael's insurance litigation practice is national in scope. He has...

(215) 988-2782

About the Author

Partner

Timothy J. O'Driscoll is a partner in the firm's Life Insurance & Annuities Practice Group, with experience in a broad range of insurance and commercial litigation.

Tim's insurance litigation experience includes coverage disputes in state and federal courts across the country, involving property and casualty, life, long-term care, and annuity policies and contracts. His commercial litigation experience includes breach of contract and business tort claims. He has successfully resolved many cases, winning jury trials and dispositive pre-trial...

(215) 988-2865

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