Judge sets public hearing on PHL Variable moratorium changes

Judge Daniel J. Klau approved a schedule Tuesday for public comment and a hearing on the modification of a moratorium on access to PHL Variable benefits.

The public hearing is set for 9:30 a.m. on Oct. 21.

Connecticut Insurance Commissioner Andrew Mais -- serving as the rehabilitator for the financially troubled PHL – proposed amending the moratorium on benefits in place since May 2024. The moratorium helped prevent “a run on the bank,” Mais told the court, while regulators created a rehabilitation plan.

Court approval of the modification is not expected to occur until the third quarter of 2025, Mais has said.

The judge approved the following schedule: All comments are to be submitted by Sept. 22, with Mais's response due by Oct. 7.

Policyholders and "other interested parties" can submit informal comments in writing to: Harold S. Horwich, Morgan, Lewis & Bockius LLP, One State Street, Floor 22, Hartford, CT, 06103, or via email to PHL.Rehabilitation@ct.gov.

Formal comments can be submitted to the court at: C/O Ronald Ferraro, Complex Litigation Docket, 400 Grand Street, Waterbury Superior Court, Waterbury, CT, 06702, Attention: X06-UWY-CV-24-6085274-S.

Mais explained how policyholders can access more of their benefits. Universal life policyholders have two options under the moratorium modification:

• Reduction in the face amount of death benefits with downward premium adjustment prospectively.
• Convert policy to a claim for a fixed amount (to be determined based on adjusted surrender value) with no ongoing premium obligation.

The modification is expected to offer fixed indexed annuity owners who have not activated their income rider or are currently receiving systematic withdrawals two alternatives:

• Activate the income rider (to the extent available under the contract).
• Receive a one-time surrender-charge free distribution of the “Free Withdrawal Amount” under the contract (typically this is approximately 10% of the contract’s account value).

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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.