Just "over the wire:" Shenandoah Life has been placed in receivership. This means that the state of Virgina has taken (at least temporary) custody of the troubled carrier.
The good news is that the system works: already, other carriers have stepped up to the plate, offering safe harbors for ShenLife insureds.
We'll have more on this over the weekend, as details come in.
[Hat Tip: An anonymous FoIB]
MORE: Readers may be wondering just why ShenLife foundered. Apparently, the predicate cause was its substantial position in certain pillars of financial stability:
"Shenandoah Life lost approximately $50 million when the value of its equity position in Fannie Mae and Freddie Mac preferred stock was significantly diminished."
[ed: "Significantly diminished" is insure-speak for "flaming burn-out."]
I must admit to having been somewhat flummoxed when I first heard the news this afternoon; it had flown completely under my radar. However, our "Anonymous FoIB" told me that it had caught pretty much everyone by surprise: as late as yesterday, another carrier had been in negotiations to buy ShenLife's entire book of business; that fell through and the Virginia Insurance Department (aka the State Corporation Commission) stepped in to act as safety net.
Just goes to show you, though, how important it is to diversify, and to avoid putting so much money into investments backed by questionable actors.