Another large policyholder asks court to intervene on PHL liquidation

Update: Tuesday afternoon, Judge Daniel J. Klau scheduled a status conference for Feb. 10 at 2:30. The rehabilitator "shall be prepared to update the court regarding the status of plans for an orderly liquidation of the Companies," Klau's order states. "Although this status conference is not a hearing on recently filed motions seeking emergency relief, the Rehabilitator shall also be prepared to discuss its position on those motions."

Another large policyholder is asking a Connecticut judge to permit an emergency intervention in the pre-liquidation proceedings for PHL Variable Insurance Co.

SWS Holdings filed a motion Friday to partially join a similar emergency motion filed Jan. 27 by BroadRiver Asset Management.

SWS Holdings owns two Phoenix Generations universal life policies worth $18 million in death benefits, policies intended to fund an eventual stock purchase agreement. The company has paid more than $12 million in premiums to date, court documents say.

The large policyholders share the same frustrations: When former insurance commissioner Andrew Mais took over the financially troubled PHL in May 2024, he sought an accompanying moratorium that capped PHL benefits at $300,000. Large policyholders say the moratorium discriminates against them while not impacting smaller policyholders.

Mais retired on Nov. 28 and was succeeded by interim Commissioner Joshua Hershman, who pivoted to liquidation in a Dec. 31 status update. That prompted renewed anger from large policyholders.

The BroadRiver policyholders have paid $57.1 million in premium payments, $19.7 million in the 19 months since Connecticut regulators began their rehabilitation of PHL Variable, their memo reads.

From the end of 2023 to September 2025, the amount of cash and short-term investments held by the PHL companies increased from $103 million to $437.5 million. Regulators fattened PHL’s coffers via the large premiums paid by investors, the BroadRiver motion says.

SWS shares those concerns about massive premiums paid amid a lack of access to PHL financial information.

Large policyholders tried multiple times to gain access to PHL financial information and were denied. A liquidation order would result in the termination of UL policies.

'A substantial portion'

SWS also raised concerns about reinsurance in a memorandum accompanying its motion.

Phoenix Life Insurance Co., the parent company of PHL Variable until 2015, had reinsurance in place for any individual life insurance contract in excess of $5 million, the memo explains. As of Dec. 31, 2012, Phoenix had reinsurance treaties in effect with 45 companies.

Phoenix ceded more than $22 billion of life insurance, 47% of the total face amount of life insurance in force, as of the end of 2012, the memo notes.

"SWS Holdings believes that a substantial portion of the more than [$12 million] in premium
payments it made to PHL, dating back to 2006, was used to cover the cost of reinsurance for the
Policies in excess of PHL’s retention limits," the memo reads. "Those excess premium amounts should be accounted for by the Rehabilitator and/or returned to SWS Holdings or used to enhance SWS’s claims in Liquidation."

SWS seeks an emergency hearing and more access to financial and reinsurance information from the PHL companies.

Judge Daniel J. Klau has not responded to the emergency motions to intervene.

© Entire contents copyright 2026 by InsuranceNewsNet.com Inc. All rights reserved. No part of this article may be reprinted without the expressed written consent from InsuranceNewsNet.com.

InsuranceNewsNet Senior Editor John Hilton has covered business and other beats in more than 20 years of daily journalism. John may be reached at john.hilton@innfeedback.com. Follow him on Twitter @INNJohnH.