SCC deciding the fate of Shenandoah Life
- April 27, 2009
The future of Roanoke-based Shenandoah Life Insurance Co. is in the hands of state regulators, who are trying to determine if the company can be saved.
The State Corporation Commission took over Shenandoah Life in February after bad investments wiped out much of its capital reserves. Donald C. Beatty, a commission lawyer and regulator, assumed control of the company’s operations as a court-appointed receivership manager.
Since then the life insurance company has continued to pay claims and offer policy renewals, but it isn’t selling any new insurance coverage. Details of Shenandoah Life’s financial troubles hadn’t been made public as of early April. The state regulators in charge haven’t released financial results since last fall.
Shenandoah Life, founded in 1914, employs about 280 people. The company’s troubles are tied to its investment early last year in nearly $50 million in Fannie Mae and Freddie Mac preferred stock. The mortgage-finance companies were taken over by the federal government last year. As Shenandoah Life’s investments went bad, there were failed efforts to get federal dollars to prop up the company, and a planned merger with an Indiana-based insurer fell through.
SCC spokesman Ken Schrad says regulators still are exploring whether the company can be salvaged. “Ultimately, receivership is an action that is taken by the insurance regulator to protect policyholders, and the No. 1 goal is to rehabilitate the company if possible,” he says. “So that is an ongoing process… to assess that possibility.” There’s no timetable for deciding what to do next, he says.