SBLI USA and S. USA have stopped writing new business as of June 30, the New York insurance department has confirms.
The company says in a June 8 letter that it retains its commitment to policyholders under a management team that will be led by Mike Akker, currently chief operating officer, who will assume the position of president and CEO.
The company is not going to be put into rehabilitation, according to David Neustadt, a department spokesperson. It is a closed block of business that will be in runoff, he adds. The decision is voluntary and was made because it was spending more money to grow the business than it was taking in, he says. The company is solvent and has proper asset/liability matching, according to Neustadt. However, if it continued on the path it was on, eventually, it would have had solvency problems, he explains. As of 12/31/2009 it was 252% of the company action level (504% of the authorized control level), Neustadt says.
In the June 8 letter to policyholders, the company said that “as we all know, it has been a tough economic climate for the past few years, and SBLI USA has not been immune. Given the environment, it was clear to us that additional capital would be necessary for SBLI USA to continue to compete and grow in the future.”
The letter continued, explaining that the company had sought options for the past year but none had come to fruition. The company also said that it had been hampered by “structural impediments that limit our flexibility.”