The ELNY debacle — perhaps one of the most egregiously botched insurance rehabilitations in modern history — is not just a black eye for the state of New York, supposedly one of the United States’ gold standard insurance regimes. It is a black eye for state regulation itself, yet another argument to be used by those who favor a federal system to gradually replace the patchwork quilt of regulatory systems that has, time and again, managed to fail the public which it is charged to serve. But these are just bureaucratic failures. The real import of ELNY is the very real and debilitating financial damage the company’s liquidation plan will have on some 1,500 families whose source of income is being cut by as much as 60% under ELNY’s terms of liquidation.
You can read all about the details of the ELNY liquidation in our special investigative feature, “The Complete ELNY Saga: 21 Years of Mismanagement, Corruption, Broken Promises and Shattered Dreams.” The short version is that ELNY was taken into rehabilitation, was subsequently mismanaged by the New York Liquidation Bureau — a rogue agency if ever there was one — and was given the go-ahead to be liquidated back in March of this year. As part of the liquidation, some 1,500 structured settlement annuitants still on ELNY’s books will have the values of their annuities severely reduced. Never mind that these annuities are the sole source of income for a lot of these families, or that the annuities are there because these families suffered a serious injury or loss. The people in ELNY’s book of SSAs who have already suffered the worst are being made, once again, to suffer the worst in what can only be described as a heavy-handed and clumsy effort to square ELNY’s accounts as much as possible while liquidating the company.