CT insurance commissioner to court: loosen moratorium on PHL Variable

Connecticut Insurance Commissioner Andrew Mais is asking a judge to loosen the moratorium on PHL Variable policies to allow for more flexible distributions for universal life and fixed index annuity owners.

Mais, serving as the official rehabilitator for the financially troubled PHL, hinted at the possibility of adjusting the moratorium in a May 20 status report. But first, regulators wanted to analyze “the options and the impact of a moratorium modification on PHL’s liquidity and prospects for rehabilitation.”

That analysis supported allowing policyholders to access more options and benefits with their policies, Mais said in a July 1 report to the court. Mais informed the court he intends to file a motion for modification of the moratorium “before the end of July.”

Court approval of the modification is not expected to occur until the third quarter of 2025, he added.

“Until the Court has entered an order modifying the Moratorium, policyholders and annuity owners will continue to be subject to the Moratorium as currently in effect,” Mais stressed.

The troubled PHL and its subsidiaries, Concord Re and Palisado Re, were put in Mais’s control after a May 20, 2024 court order. Rehabilitators released a second “Accounting and Status Report” Tuesday.

In his May 20, 2025 status report, Mais outlined efforts to sell or reinsure PHL books of business. Thirteen companies signed non-disclosure agreements and have access to a “virtual data room” with an actuarial appraisal report, a summary of existing reinsurance arrangements, and details regarding the PHL companies’ arrangements with third-party administrative and investment providers.

Another dozen companies were in discussions with Connecticut counsel to resolve concerns about the NDA, Mais said in the report.

The commissioner, “continues to believe that a sale of some or all of PHL’s lines of business will provide the best outcome for policyholders,” Mais said in the report. “The sales process has launched, but it is still at a relatively early stage. The Rehabilitator expects to have expressions of interest from potential buyers in the third quarter of 2025.”

Modification details

PHL issued life insurance and annuity products and related supplemental contracts to policyholders nationwide. Concord and Palisado are captive insurers whose only business is the reinsurance of PHL’s liabilities.

As part of his rehabilitation effort, Mais introduced the moratorium on benefits payments until a Connecticut court approves a final plan. Several policyholders filed objections to the moratorium.

While sales talks are ongoing, Mais explained how policyholders can access more of their benefits. Universal life policyholders have two options under the moratorium modification:

• Reduction in the face amount of death benefits with downward premium adjustment prospectively.
• Convert policy to a claim for a fixed amount (to be determined based on adjusted surrender value) with no ongoing premium obligation.

The modification is expected to offer fixed indexed annuity owners who have not activated their income rider or are currently receiving systematic withdrawals two alternatives:

• Activate the income rider (to the extent available under the contract).
• Receive a one-time surrender-charge free distribution of the “Free Withdrawal Amount” under the contract (typically this is approximately 10% of the contract’s account value).

The motion will be posted on the PHL Rehabilitation Website at when it is filed, Mais said, and notice will be provided to affected policyholders as directed by the court.

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