Between 2002 and 2009, over 4,000 structured settlement annuities issued by Aviva PLC subsidiaries Aviva Life Insurance Company of North America and Aviva Life Insurance Company of New York were backed by a guarantee from CGU International Insurance Company, now known as Aviva International Insurance Company.
The guarantee was maintained under a Capital Maintenance Agreement that was discontinued with Athene’s acquisition of that block of Aviva structured settlement annuities, which adversely affected the strength of the promise to make periodic payments under those policies.
The affected structured settlement payees filed a class action lawsuit against Aviva and Athene over the cancelling of those parent company guarantees, and in October 2018 the court approved a class settlement under which Athene will provide a replacement parent company Capital Maintenance Agreement guaranteeing the annuities for those structured settlement payees at a value of up to $41 million.
Prospectively, the lesson for plaintiff attorneys is that, when evaluating the financial strength of structured settlement annuity issuers, the presence of a Capital Maintenance Agreement (or other form of “keep well” agreement) enhances the strength of the promise to make agreed periodic payments.
In addition to the discussion of the Griffiths v. Aviva case featured in Release 65, "Structured Settlements and Periodic Payment Judgments" (S2P2J), offers plaintiff attorneys and their advisors an entire Chapter 5 specifically addressing their roles and responsibilities related to structured settlements.