How Many Annuity Companies Have Failed?

0:00
Hi there, Stan The Annuity Man, America's annuity agent, licensed in all 50 states

0:04
and Puerto Rico. Wearing the Stan retro basketball thing because I played a little

0:10
basketball in college at the University of Central Florida. Could shoot the rock.

0:14
Didn't have a choice because my Mom and Dad were both college basketball coaches. So,

0:20
not a fun childhood. I'm just telling you, has a little scars, as they say.

0:24
But, hey, good topic today. How many annuity companies have failed,

0:29
Stan The Annuity Man? Yes, there have been, but I'm going to tell you what happened after this.

0:43
So, how many annuity companies have failed, Stan The Annuity Man? You hear me pounding the table

0:48
about annuities and contractual guarantees, etc., etc. I'm going to talk about how many have failed

0:56
since I've been doing this for three decades, okay? The ones that were on my radar screen,

1:02
the ones that I knew about. Total, I don't know about Sinking Sands of Texas and Crappy

1:09
Insurance Company LLC. I don't know about those people because I don't deal with those people.

1:13
These three I am familiar with because with the last two, I had people contact me and

1:21
ask me if I could help them through the process, okay? So, that was interesting.

1:27
But there's been three. All three were absorbed by

1:31
the state guarantee fund. And as you know, with annuities,

1:34
each state has what's called a state guarantee fund that backs up policies up to a certain level.

1:41
Typically, when we recommend somebody, we're not looking at that state guarantee fund,

1:46
we're looking at the claims-paying ability of the company. A+ or better for lifetime income

1:50
because we're marrying that company for lifetime income. And then for MYGAs, we're dating them.

1:54
So, we're looking at the claims-paying ability for that specific, if it's a three-year or five-year,

2:00
whatever you choose, we're making that recommendation based on that.

2:03
So, A+ or better for lifetime income. And then it depends on who we're talking about.

2:07
B++, A-, A, whatever for MYGA. So, it is different.

2:14
The last two companies, one in 2021 and one in 2008, were both absorbed by the

2:20
state guarantee fund, and every single person got every single penny back,

2:26
even above and beyond the state guarantee fund. Pretty good result, right?

2:32
The other one was when I first started the business. This is probably 25-plus

2:36
years ago. That was the original one that I remember. And I'm not going to mention names

2:40
of companies. It's just not fair. And plus, I don't want their lawyers to go, "Well,

2:44
Stan threw us under the bus." No, you're already under the bus. Stan didn't throw you anywhere.

2:49
But I never name carrier names. So, if you want the names, I can give them to you.

2:54
Just email me, [email protected], or schedule a call, and I'll tell you who they are.

3:00
But the other one, the third one, everybody got their money back as well.

3:04
Now, the way that happened was very interesting.

3:07
The first one took about six to nine months for

3:10
people to get all their money back. It was kind of a long, drawn-out process.

3:13
The second one, in 2008, another insurance company came and bought them hook, line, and sinker and

3:20
just absorbed all the contractual guarantees that were in place. That was an easy one.

3:24
The third one, the one that happened in 2021, that was a little different because the person

3:30
running the company, and I'm going to say allegedly because I don't want

3:33
to get sued, allegedly did not give the right numbers to the state insurance commissioner,

3:39
and they were absorbed. And allegedly, he is serving time.

3:45
But every single person got every single penny

3:49
back above and beyond the state guarantee fund limit.

3:53
Now, I say that with caution because I don't want you to say, "Well, Stan said, you know,

3:58
just buy it. Who cares? You're going to get taken care of." I didn't say that,

4:01
okay? What I'm saying is it worked out that way.

4:04
Which leads me to my next part of this talk, which is about what I call the

4:10
annuity mafia. Annuities are confidence products, and they solve for four things:

4:15
principal protection, income for life, legacy, and long-term care.

4:18
But people have confidence in the life insurance companies issuing the annuities to back up that

4:23
guarantee. They're transferring the risk for that reason. These are transfer-risk products.

4:28
Now, the annuity industry knows that this is a fragile golden goose of confidence that they

4:33
don't want to go away. So, my opinion, without hard facts, but pretty good whisper facts, the

4:43
big boys are protecting the industry. They're not allowing shenanigans to go on.

4:48
And the National Association of Insurance Commissioners does a great job of looking

4:53
into these companies and making sure at the state level, when they approve them, that they're solid

4:58
because the state insurance commissioner in your state is trying to protect you.

5:04
I'm depending on them and the ratings companies and us doing

5:09
our own due diligence to protect you as well. And then you have the big boys,

5:14
the big carriers, trying to protect you as well. We've just seen it play out.

5:18
So, in my career, I've seen three that were on my radar screen. I don't know about any lowly rated,

5:25
unrated company. I don't do that. I don't have time to do that.

5:32
So, I don't know what that total number is of Sinking Sands of Texas and C-rated

5:36
and D-rated companies. I don't care. But all I'm saying is, in my career,

5:41
which is three decades, okay, I've seen three, and all three were different. All three,

5:48
everybody got their money back, but all three happened in a different form or fashion.

5:52
But all three validated why I'm here, why I left Dean Witter, PaineWebber, Morgan Stanley,

5:58
UBS to come to the life insurance industry, because I think this is the safest place for

6:04
your money. I really believe that, and it's been proven out over time.

6:10
Now, what happens in the future? I don't know. Who knows? I don't know that. All I

6:15
know is that the way that we approach annuities and the way that we approach recommendations,

6:20
I'm batting a thousand percent. Hope that continues. I'm serious about this.

6:25
My license is on the line. I take that seriously.

6:30
So, when my team in Las Vegas, they're all licensed in all 50 states,

6:35
but they're not on commission. They're taking directives from me.

6:38
They're underneath me. They're not on commission. The buck stops here.

6:43
So, if I'm recommending something, then there's a reason. I'll explain it if you

6:48
want to. It's very easy for lifetime income: A+ or better. That's a no-brainer, as they say.

6:56
But in my career, I've seen three, and they all worked out well for the

7:04
consumers that were with those companies. They got all their money back. Period.

7:09
What happens in the future? I don't know. But don't come to me and say, "What happens when

7:12
an A+ or A++ company goes out of business?" Please don't waste my time. That's a joke, okay?

7:18
It's not going to happen. Take your tinfoil hat off and throw it away. It's not going to happen.

7:24
But I do know this: with 15,000 people hitting age 65 every single day, that's what I call a

7:33
demographic tidal wave of customers. And you need to know this: the annuity industry is wanting

7:41
to get right in front of that. Period. End of story. And they're going to do whatever it takes

7:49
financially and regulatory-wise and oversight-wise to make sure that that customer's money is safe.

7:58
Now, recently you've seen some articles on private credit. I just did a video on private credit.

8:04
But private credit, we've been following that since 2021. It's a $2 trillion market

8:13
of a $128 trillion financial market in the United States. So, it's an alternative asset class.

8:20
Been on my radar screen for four years, five years now. Not a big deal.

8:27
There's two carriers we're watching. We're not panicking, but we're watching.

8:30
Hey, man, I've done this. I was on the other side. I was at Morgan Stanley.

8:34
I worked in World Trade Center 2, okay, before it fell. I understand that side.

8:39
I understand alternative assets. I understand all of that, and I'm keeping an eye on it.

8:45
Do me a favor. Reach out to me if you have any questions, have any concerns,

8:49
[email protected], [email protected].

8:52
One last thing: above my head, there's a video that I did on artificial intelligence and how

8:57
it's going to affect the annuity industry. Not if it's going to affect, not can it, no,

9:02
how it's going to. I just don't know the when. I think it's going to be between the next two

9:09
years to five years, and it could happen sooner, like everything else has happened sooner with AI.

9:14
So, watch that video. Go to my site at theannuityman.com, download the books, run quotes,

9:20
contact me, be proactive so you can make a good decision on your terms and your time frame. Alright?

9:27
I'm Stan The Annuity Man. See you next time.