Frequently Asked Questions regarding ELNY Restructuring Agreement and GABC

Revised 11/15/2013

If You Have Questions, Please Call GABC's Toll-free Information Line
At 800-421-8850

Part I. General Information

1. What is the current status of Executive Life Insurance Company of New York ("ELNY")?

   On April 16, 2012, the Supreme Court of the State of New York, Nassau County ("Receivership Court"), entered an Order finding ELNY to be insolvent and approved a Restructuring Agreement in connection with the liquidation and restructuring of ELNY. By Order of the Receivership Court, the Superintendent of Financial Services of the State of New York ("Receiver") was directed to liquidate ELNY's business and affairs in accordance with New York Insurance Law and in substantially the manner provided in the Restructuring Agreement. The effective date of ELNY's liquidation (also known as the "Liquidation Date") is the closing date of the Restructuring Agreement, which occurred on August 8, 2013.

   Substantially all of ELNY's remaining assets have been transferred to Guaranty Association Benefits Company ("GABC"), a newly created not-for-profit insurance company that is referred to as NEWCO in the Restructuring Agreement. Beginning on the Liquidation Date, GABC is responsible for making payments to payees and beneficiaries in accordance with the Restructuring Agreement.

2. What does the liquidation and restructuring of ELNY mean for contract owners, payees and beneficiaries of ELNY contracts?

   Benefit payments for all ELNY contracts have been restructured to the amount that can be satisfied by assets from the ELNY estate as set forth in the Restructuring Agreement. GABC has assumed the restructured ELNY contracts and has replaced ELNY as the benefit provider. GABC has then enhanced the benefits of the restructured contracts with funds and guarantees provided by the life and health Guaranty Associations and certain life insurance companies. While after enhancement most payees and other beneficiaries will continue to receive from GABC the same benefit payments they have always received from ELNY, benefit payments for some payees and other beneficiaries have been reduced. For more information about your benefits, please see the answers to questions 2 and 3 under Part II below.

3. What is Guaranty Association Benefits Company?

   Guaranty Association Benefits Company ("GABC"), referred to as "NEWCO" in the Restructuring Agreement, is a new special purpose, not-for-profit insurance company formed by the member life and health Guaranty Associations of NOLHGA affected by the liquidation of ELNY. GABC has been funded with estate assets of ELNY, financial contributions from the Guaranty Associations that committed to participate in the Restructuring Agreement and additional support from certain life insurance companies. GABC has assumed substantially all of ELNY's liabilities and will make payments to ELNY payees and beneficiaries as they become due and payable in accordance with the Restructuring Agreement.

   GABC is operated by insurance company professionals and other experienced individuals and is subject to regulatory supervision by the District of Columbia Department of Insurance, Securities and Banking. The Receiver will have authority to make examinations into GABC's affairs concerning its compliance with the Restructuring Agreement.

4. What are the Guaranty Associations and NOLHGA?

   Guaranty Associations protect, up to statutory limits, state residents who are contract owners, payees and beneficiaries of certain insurance contracts issued by a licensed life or health insurance company that has gone into liquidation. NOLHGA is a voluntary association made up of 51 life and health insurance Guaranty Associations in the 50 states plus the District of Columbia. Through NOLHGA, the Guaranty Associations work together to provide continued protection for contract owners, payees and beneficiaries affected by a multi-state insurance company insolvency like ELNY. Under the Restructuring Agreement, the participating Guaranty Associations affected by the ELNY liquidation have contributed funds to GABC. Those funds were obtained through assessments paid by healthy life insurance companies to provide coverage to contract owners, payees and beneficiaries up to the limits set forth in the Guaranty Association governing laws. For more information, please visit www.nolhga.com.

5. Can I see the Restructuring Agreement?

   The parties to the Restructuring Agreement did not make any material changes to the Restructuring Agreement that was filed with the Receivership Court on March 6, 2012, which is available at www.nylb.org/ELNY.htm. A final Restructuring Agreement, executed by the parties thereto, is also available in the Important Information section and www.nylb.org/ELNY.htm.

Part II. General Overview of Payments from GABC

1. Who will send benefit checks to payees and beneficiaries?

   GABC will make payments to ELNY payees and other beneficiaries as they become due and payable under the Restructuring Agreement.

2. What is the status of benefit payments?

   Approximately 1,500 ELNY payees had their benefits reduced under the Restructuring Agreement. If you are one of those payees, those reduced payments began with all payments due on and after the Liquidation Date. If you are an ELNY payee whose benefits were not reduced under the Restructuring Agreement, then your benefits should continue to be paid by GABC as previously scheduled for all payments due on and after the Liquidation Date. You can request information about expected benefits under your annuity by calling GABC at 800-421-8850.

3. Will benefit payments change in the future?

   From the Liquidation Date (August 8, 2013) through November 17, 2013, benefit payments were made based on the Projected Liquidation Date Schedule 1.15. From November 18, 2013 forward, benefit payments will be made based on the Final Liquidation Date Schedule 1.15. Payees who are not fully protected under the Restructuring Agreement may see an adjustment to benefit payments when the Final Liquidation Date Schedule 1.15 is implemented. If any benefit payment adjustment means that a payee received one or more underpayments prior to November 17, the payee will receive a one-time payment in the amount of the underpayment. GABC is reviewing potential overpayment situations on a case-by-case basis to see if any action should be taken in connection with those situations.

4. When and in what manner will a payee or beneficiary receive benefit payments?

   Most payees and beneficiaries of contracts fully protected under the Restructuring Agreement will receive 100% of their scheduled benefit payments from GABC at the same time and in the same manner as specified in their ELNY contracts. Most payees and beneficiaries of contracts not fully protected will continue to receive benefit payments from GABC utilizing the same payment schedule as their ELNY contracts, but at a reduced level to reflect the restructured value of such contract. Please call GABC's toll-free information line at 800-421-8850 for any questions regarding your benefit payments.

5. Are there tax implications for contract owners, payees or beneficiaries as the result of the transfer of ELNY's obligations to GABC?

   There should not be any tax implications for contract owners, payees or beneficiaries as the result of the transfer of ELNY's obligations to GABC.

Part III. Certain Other Payments Possible

1. Is it possible that a payee or beneficiary not fully protected might get additional payments from the ELNY estate later?

   Yes. It is possible that at some point in the future GABC, upon approval from the Receivership Court, will transfer all of its liabilities to a financially strong third party commercial life insurer and remit the net transfer proceeds back to the ELNY estate. Alternatively, if GABC does not consummate such a transfer, any leftover assets in GABC after all of its contractual obligations have been satisfied will be transferred back to the ELNY estate. In either circumstance, the ELNY estate will distribute all remaining assets in accordance with the priorities set forth in the Restructuring Agreement such that a payee or beneficiary not fully protected may receive additional benefit payments at that time. It is, however, unlikely that any additional benefits will become available soon.

2. Is it possible that a payee or beneficiary not fully protected might get additional payments from other persons who are not parties to the Restructuring Agreement?

   Yes. Certain property-casualty companies and other entities ("SSA Contract Owners") have obligations to make supplemental payments to beneficiaries and payees who are not fully protected under the Restructuring Agreement and whose ELNY contracts were issued in connection with structured settlement agreements. Beneficiaries and payees whose ELNY contracts were issued in connection with structured settlement agreements are encouraged to contact, or may be contacted by, their SSA Contract Owners with respect to any supplemental payments they may be eligible to receive.

   A consortium of life insurance companies established a separate "Hardship Fund" that provided certain affected ELNY payees with additional financial support based on need. After the Hardship Fund's deadline passed, it distributed all of its funds and closed.

   (Please note that the SSA Contract Owners are not parties to the Restructuring Agreement, and the Hardship Fund is not a component of the Restructuring Agreement. Additionally, payments from the SSA Contract Owners or the Hardship Fund are not governed by the Restructuring Agreement.)