PrintPrintShenandoah Life Insurance Co. is the first insurer operating in South Carolina to face severe financial troubles, according to the S.C. Department of Insurance. Shenandoah ranks 53rd out of 413 companies licensed to do business in South Carolina. The company writes life insurance, dental policies and sells annuities.
By Andy Owens
aowens@scibznews.com
Published Feb. 25, 2009
The 53rd-largest insurance company doing business in South Carolina has gone into receivership after losing $50 million in mortgage stocks.
The trouble started when Roanoke, Va.,-based Shenandoah Life Insurance Co. lost millions of dollars in value from its investments in Fannie Mae and Freddie Mac stock.
Shenandoah is the first insurer operating in South Carolina to face severe financial troubles, according to the S.C. Department of Insurance. Shenandoah ranks 53rd out of 413 companies licensed to do business in South Carolina.
The company received $9.2 million in policy premiums in South Carolina during 2007, which represented 0.519% of the life insurance market in the state. The largest company operating in South Carolina, Metropolitan Life Insurance Co., wrote $76.5 million in 2007 with a 4.3% market share.
Shenandoah also writes dental insurance and offers annuity products.
Requests for comment from the Business Journal about Shenandoah’s policyholders in South Carolina went unanswered. The company does offer several documents on its Web site to explain what has happened and offer information for policyholders.
“My staff and I are reviewing the books and records of Shenandoah and are evaluating what can be done to remove the causes of the receivership,” Deputy Receiver Alfred W. Gross wrote in a letter to policyholders on Monday. “We will be working on corrective measures for Shenandoah and will keep you advised of further developments.”
An attorney for the receiver said several measures had been implemented in an effort to save the company, including a moratorium on paying certain claims. The systematic policy withdrawals, policy loans, contract conversions and other similar payments or obligations have been suspended indefinitely.
“At this time, the deputy receiver will allow accident and health claims, including disability, dental and Medicare Supplement, death claims and periodic annuity payments, and they will so continue until further notice,” the receiver said in a statement.
Companies and individuals who have taken out policies with Shenandoah in the last 30 days can have their premium refunded. The lawyer said that normal operating expenses are being paid and some payments to other parties are under review.
If the company can’t be saved, the receiver said policyholders will be notified and the company will be liquidated. The company is not writing any new policies but is accepting renewals. No policies have been canceled. The receiver said changes to existing policies could come in the future.
Click here for an 11-page PDF of questions and answers for policyholders. Policyholders can call the receiver’s office at 804-726-2630 or Shenandoah’s office at 540-985-4400 for more information.
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