The owner of a fixed annuity issuer is clashing with Utah insurance regulators over how the regulators are valuing its investment portfolio.
The Utah department has issued an emergency order telling the company, Sentinel Security Life Insurance Company, to stop selling new products by Dec. 31.
Regulators also ordered two Sentinel Security Life reinsurance affiliates, Haymarket Insurance and Jazz Reinsurance, to stop writing new business.
The companies are owned by Advantage Capital Partners, a company also known as A-CAP.
The Utah order does not affect renewal policies, and it does not affect another annuity issuer owned by Advantage Capital, Atlantic Coast Life.
Utah regulators are acting because Harvest Investments, a valuation specialist used by an examination firm the regulators hired, believes that the Sentinel Security Life group's asset total includes too much value related to three loans. The loans were made to companies involved with aviation and aviation leasing. Harvest Investors found that the three loans are non-performing and have a low expected recovery value. Using what Harvest Investors believes to be the loans' true current market value leads to the Sentinel Security Life group having $522 million in negative capital and surplus, according to the emergency order.
