Did you lose money investing in Colorado Bankers Life Insurance Annuities?
Galvin Legal, PLLC is launching an investigation on behalf of investors who suffered losses investing in Colorado Bankers Life Insurance Annuities at the recommendation of their financial advisor. If you suffered losses investing in the investment, then Galvin Legal, PLLC may be able to help you recover your losses in a Financial Industry Regulatory Authority (“FINRA“) arbitration claim against the brokerage firm that recommended the investment.
Colorado Bankers Life Insurance Company, Bankers Life Insurance Company, Southland National Insurance Corporation, and Southland National Reinsurance Corporation, consented to an Order of Rehabilitation entered on June 27, 2019, by the Superior Court of Wake County, North Carolina (“Court”) pursuant to a petition filed by the Commissioner of Insurance of the State of North Carolina, Mike Causey. The Commissioner took action after determining that the long– term liquidity of the investment portfolios of the Companies had deteriorated to the point that the North Carolina Department of Insurance needed to act to protect the policyholders.
The Court appointed the Commissioner as Rehabilitator of the Companies. The Rehabilitator has appointed Noble Consulting Services, Inc., to serve as Special Deputy Rehabilitator to oversee the rehabilitation process. Mike Dinius and John Murphy of Noble will act for the Rehabilitator in the rehabilitation proceeding, under the title of Special Deputy Rehabilitators. This was done to protect the overall account values of the Companies’ annuity holders and the interests of all policyholders. Due to the issues with the Companies’ investments, it was necessary to place the Companies under Court protection so that the investment issues could be addressed in an orderly fashion by the Rehabilitator under Court supervision. In accordance with the Order, the Rehabilitator has taken possession of all known assets of the Companies. The Rehabilitator is currently evaluating the Companies’ in-force policies, by policy type, investments, as well as reinsurance programs in furtherance of determining the feasibility of a successful rehabilitation of the Companies. The goal of the Rehabilitator is to reduce the amount of affiliated investments and to increase the long-term liquidity of the Companies.
Due Diligence Requirement
FINRA requires brokerage firms to conduct due diligence on investments and to conduct a suitability analysis when recommending securities to a customer that takes into account the customer’s knowledge and experience. FINRA Rule 2111(a) states that “a member or an associated person must have a reasonable basis to believe that a recommended transaction or investment strategy involving a security or securities is suitable for the customer, based on the information obtained through the reasonable diligence of the member or associated person to ascertain the customer’s investment profile. A customer’s investment profile includes, but is not limited to, the customer’s age, other investments, financial situation and needs, tax status, investment objectives, investment experience, investment time horizon, liquidity needs, risk tolerance, and any other information the customer may disclose to the member or associated person in connection with such recommendation.”
Rule 2111 is composed of three main obligations: reasonable-basis suitability, customer-specific suitability, and quantitative suitability. Brokerage firms that fail to conduct adequate due diligence on investments they recommend, such as Colorado Bankers Life Insurance Annuities, or that make unsuitable recommendations can be held responsible for the customer’s losses in a FINRA arbitration claim.
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