A life insurance company is interested in buying Shenandoah Life Insurance Co, which has been in receivership in Virginia since February 2009.

Alfred W. Gross

Prosperity Life Insurance Group has a 90-day exclusive negotiating period, which can be extended, to negotiate a deal to buy the troubled life insurance company, according to the Virginia State Corporation Commission Bureau of Insurance.

The deputy receiver, Virginia Insurance Commissioner Alfred W. Gross, has been leading efforts to rehabilitate the company and making decisions regarding its day-to-day operations since being placed into receivership.

Any deal for Roanoke, Va.-based Shenandoah would require the approval of Virginia insurance regulators.

Gross said in a statement that the purchase of Shenandoah would not just “best serve the interests of all its insureds and creditors,” but also “affords an opportunity for the company to remain an important presence in the regions it serves and to preserve jobs in Roanoke.”

“We are pleased to have the opportunity to further develop and refine our plan to recapitalize Shenandoah,” said Prosperity Life’s president, Jose Montemayor, in a statement. “The recapitalization aims to restore Shenandoah’s financial strength to allow it to continue to serve policyholders as it has been doing since its founding in 1916.”

Shenandoah is a Virginia-domiciled life and health insurer that, at the time it was placed in receivership, wrote primarily life, annuities and dental insurance in 31 states, and Washington, D.C.

A moratorium placed on the payment of claims and benefits, except for accident and health claims, death claims, and periodic annuity payments, at the time of receivership will remain in place during the parties’ negotiations. And, Shenandoah will not resume the issuance of new insurance policies until a plan of rehabilitation is approved by the SCC.

12 Responses

1. Mary E Grace Says:
   January 8th, 2011 at 7:16 pm

   I surrendered my policy last year and am still waiting on my check.

2. yvon mckoy Says:
   February 13th, 2011 at 12:00 pm

   I surrendered my policy, still waiting on my check

3. McCoy-Jones Says:
   February 18th, 2011 at 2:07 pm

   I surrender my policy in November 2010 . Have not receive my check.

4. Lawrence R.Merhaut Says:
   March 14th, 2011 at 7:28 pm

   How do I surrender my life insurance policy with Shenandoah and collect the cash value of my policy?

5. charvette ellis Says:
   March 25th, 2011 at 8:09 am

   i surrendered my policy in feb,2010 and have not recieved my check don;t think it is fair to have to wait this long.

6. Dave Row Says:
   April 11th, 2011 at 10:46 pm

   As an insurance professional who is in the same boat as everyone else who has a contract with Shenandoah Life, I’d like to comment on the 5 statements above. These folks say they “surrendered” their policies and haven’t gotten a check yet…. in reality, they haven’t actually surrendered it…..albeit, they have sent in the surrender paperwork, but a cash value driven contract such as a Whole Life or Universal Life contract is not technically surrendered until a check is cut with the name of the OWNER on it. If you die today and a check hasn’t been processed, the death benefit is still in place, assuming there is still cash value in the policy. Once a policy IS surrendered and a check has been cut, then your benefits under the contract cease to exist. All of these folks above (assuming they do have cash value driven policies) still have coverage and will continue to do so until the day Shenandoah Life is either bought by another company and that company assumes all of their contracts in full (and allows surrendering of policies to take place), or the Deputy Receiver of the state of Virginia authorizes Shenandoah Life to allow cash surrenders to take place. The latter of which I don’t see happening. All of us will most likely have to wait until Black Diamond Capital Partners, and or, Prosperity Life get off their duffs and finalize a deal. Or, another company comes along and wants to buy Shenandoah Life. If you have a Term policy, and want to walk away from Shenandoah, simply stop paying premiums via the mail, or authorize S.L. to stop your monthly bankdraft. Once the policy goes beyond the 31 day grace period, the policy will lapse and you no longer have coverage. If you have a Universal Life policy with them and want to walk away, you can do the same procedures above and let what cash value that remains in the policy pay the Cost Of Insurance (the monthly amount that it costs S.L. to provide you with coverage) NOT to be confused with the PREMIUM you are paying. Once the cash value drops to $0.00, the policy terminates. However, if even one dollar of cash value remains in the policy, then the whole death benefit remains in force should you die! How long the policy will remain in force without you paying out of your pocket depends on how much cash value you have in the policy and the cost of insurance for your given age. For example: You just had a birthday last month and have $500.00 of cash value in your policy, your cost of insurance is $41.67/month, and your premium is $60.00/month. Since you have stopped paying the premiums on a monthly basis, you can expect the policy to last another 12 months before it runs out of cash value and then terminates. You have kept the premiums you would have paid for those past twelve months ($720.00), in your pocket. All you’re actually doing is letting the cash value available in your account pay the cost of insurance for you. Obviously, I wouldn’t recommend anyone surrender a policy or let one run out unless you already have other coverage that’s been in place for some time. If you are unhealthy, uninsurable, or simply can’t afford coverage with another company, then it would be prudent for you to stay in the contract you now have and make sure you keep the policy inforce by paying premiums regularly. Should anyone tell you anything to the contrary, don’t take their advice. Hopefully this receivership process will end in the near future and all of us can make our own decisions on what to do with our contracts.

7. Selena Says:
   April 14th, 2011 at 7:24 pm

   Thanks Dave Row for the detailed information. I found it to be very informative especially since I have never been through this type of scenario with a company before.

8. charvette ellis Says:
   April 20th, 2011 at 9:40 am

   thanks dave row for the information.

9. Peggy Moore Says:
   June 13th, 2011 at 11:07 pm

   I have not been allowed to draw an annuity from my IRA and now wonder if I will lose all I put into this company or if I will ever have the right to apply for it?

10. Bernetha Jamison Says:
    August 17th, 2011 at 2:17 pm

    BcJone
    Thanks Dave of the information on Term policy.
    If you have a Term policy, and want to walk away from Shenandoah, simply stop paying premiums via the mail, or authorize S.L. to stop your monthly bankdraft. Once the policy goes beyond the 31 day grace period, the policy will lapse and you no longer have coverage.

    Is possible to collect payment on term policy due to the receivership and rehabiliation of the company.

11. Mabel Says:
    October 10th, 2011 at 4:31 pm

    I have an annuity from which I was receiving a monthly income. Of course that stopped long ago! Is there hope that the funds invested will be returned to me? Maybe Dave could comment of this????

12. john millican Says:
    January 7th, 2012 at 12:10 am

    Seems to me that if they aren’t going to honor their insurance contracts, they should not be collecting premiums from people.

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