Connecticut’s insurance landscape is undergoing significant changes as PHL Variable Insurance Company prepares for a potential sale. Andrew Mais, the state’s Insurance Commissioner, recently shared that most preparations for this sale have been completed, although the process has taken longer than anticipated.
In a status report dated May 20, 2025, Mais indicated that the necessary actions to support the marketing or sale of PHL Variable and its affiliated businesses are largely finished. This development comes after the company was placed into rehabilitation by the Connecticut Superior Court in May of the previous year. The court appointed Mais as the rehabilitator, implementing a moratorium to limit certain policy transactions and payments. This step aimed to manage the company’s cash outflows while a long-term plan was devised.
PHL Variable has been facing serious financial challenges, reporting a capital and surplus deficit of approximately $900 million. Projections suggested that its assets could run out by 2030, leaving policyholders with around $1.46 billion in liabilities. The company has seen its financial situation deteriorate over the years, with total adjusted surplus dropping from $239 million in 2013 to just $85 million by the end of 2022.
To facilitate the sale, the rehabilitation team initially identified 50 companies that might be interested in acquiring PHL Variable or parts of its business. By April, this list had been narrowed to 45, and non-disclosure agreements were sent out for review. As of May, 13 companies had signed the NDA, gaining access to a virtual data room filled with key documents, including actuarial appraisals and summaries of reinsurance arrangements. An additional 12 firms are currently discussing concerns with the rehabilitator’s legal counsel.
Mais emphasized that the sale strategy aims to achieve a better outcome for policyholders and stakeholders than a liquidation would, potentially generating equivalent value. Despite receiving $245 million in capital infusions and issuing $55 million in surplus notes, PHL Variable’s financial statements for 2024 still show a negative capital and surplus of $2.2 billion.
The rehabilitation process has not been without its challenges. Legal disputes have arisen from policyholders, particularly those with life insurance benefits exceeding $300,000, who feel they are being treated unfairly compared to those with smaller claims. This concern highlights the complexities of the rehabilitation process and the importance of equitable treatment for all policyholders.
PHL Variable Insurance Company, incorporated in Connecticut in 1981, has seen significant changes over the years. It became part of The Phoenix Companies, which was acquired by Nassau Reinsurance Group Holdings in 2016. In 2021, PHL was separated from Nassau and became a subsidiary of GG Holding Company.
As the situation develops, all eyes will be on Connecticut’s insurance market and the fate of PHL Variable. The outcome of this sale process could have lasting implications for policyholders and the broader insurance community.