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PHL Variable Insurance in Rehabilitation Since May 2024: Liquidation Expected 2027, Est. 34%-57% Recovery

By Jorge··21 min read

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Quick Answer

As of November 9, 2026, PHL Variable Insurance Company is still in rehabilitation, not in liquidation, and no rehabilitation plan has been filed. The Connecticut Superior Court placed PHL, and its two captive reinsurers Concord Re, Inc. and Palisado Re, Inc., into rehabilitation on May 20, 2024 (docket X06-UWY-CV-24-6085274-S) and appointed the Connecticut Insurance Commissioner as Rehabilitator. On December 31, 2025 he told the court that a standalone rehabilitation plan is not feasible and that a liquidation order will be required. His September 30, 2026 report says the transition to liquidation “is expected to occur in 2027.” Until then the June 25, 2024 moratorium stays in force: PHL's general account pays at most $300,000 of life insurance death benefits and $250,000 of annuity benefits per person, and non-variable annuities and life policies cannot be surrendered. For the part above state guaranty limits the Rehabilitator's estimate is 34% to 57% of the claim, before any guaranty payment. PHL's statutory capital and surplus was negative $2.42 billion at December 31, 2025.

Key Takeaways

  • Status on November 9, 2026: rehabilitation, with a liquidation order expected in 2027. The Connecticut Insurance Department's policyholder page, last updated July 29, 2026, says PHL “is under court-supervised rehabilitation,” and the Rehabilitator's third liquidation-planning report (September 30, 2026) still says 2027. We found no liquidation order on that page or in that report.
  • Why liquidation: the Rehabilitator reported on December 31, 2025 that after a sale process “all of PHL's blocks of business are materially impaired,” not only the high-face-amount universal life block, and that the companies lack the assets to move any block to a buyer without leaving other policyholders with less than the guaranty associations would pay. The guaranty associations are triggered only by a liquidation order with a finding of insolvency.
  • The moratorium (court order of June 25, 2024) caps what PHL's general account pays at $300,000 on life insurance death benefits and $250,000 on annuity benefits, with a combined $300,000 cap on one person's life policies and annuities. Surrenders, withdrawals and loans are not allowed on non-variable contracts; required minimum distributions and recurring payments in place on May 17, 2024 are. Variable contracts can still surrender the value held in the separate account.
  • Estimated recovery on the part of a claim that exceeds the guaranty limit (an “estate claim”): 34% to 57% (April 17, 2026 Distribution Analysis Summary), and 73% to 95% for claims on the non-unitized separate account. On a $1,000,000 universal life death claim with $300,000 paid under the moratorium and a $300,000 state limit, the unpaid $400,000 would recover $136,000 to $228,000.
  • Reported financial position: total capital and surplus of negative $2,419,352 thousand at December 31, 2025 (negative $2,267,183 thousand a year earlier) on total admitted assets of $3,610,215 thousand, of which $2,172,730 thousand is separate account assets. Claims payable above moratorium limits rose from $230 million to $589.9 million in 2025.
  • Elections made in 2026 are final. About 14,800 universal life and fixed indexed annuity holders were eligible; the 45-day election windows ran from the cover-letter date of packages mailed between March 6 and July 2026, and the Rehabilitator says an election that has been processed cannot be changed afterwards, even if PHL moves to liquidation.
  • SEC angle: PHL Variable Insurance Company itself has no SEC filing on EDGAR since a Form 424B3 on October 14, 2015, but its registered separate accounts still file. A Phoenix Edge variable annuity prospectus summary dated May 1, 2026 warns of “a significant risk that the financial guarantees and obligations under your contract will not be fulfilled.”

CSV · 65 rows

PHL Variable Insurance Company in rehabilitation: timeline, moratorium caps, election options, recovery ranges, 2025 balance sheet, SEC filings

65 rows from Connecticut Insurance Department postings, the court filings and orders it links, and EDGAR: dates and docket, the $300,000 and $250,000 moratorium caps, election options, 34% to 57% estimated recovery, the statutory balance sheet at December 31, 2025 and 2024, and the separate-account filings.

What is true today, and what older summaries get wrong

The May 20, 2024 press release said the Rehabilitator expected “to develop a plan of rehabilitation for the Companies over the next twelve months.” The primary documents now say something different, in four points.

  1. There is no plan, and there will not be a standalone one. In the Rehabilitator's own words in the December 31, 2025 report, a pure rehabilitation plan, “one without any funding from outside of the Companies' assets,” is not feasible. Any resolution “must include a liquidation order.”
  2. There is no haircut on your policy yet. The reductions are the moratorium caps and, for owners who chose them in 2026, the face-amount reductions and surrender claims described below. A filed plan with a percentage cut to account values does not exist; what exists is an estimate of what excess claims might recover.
  3. Liquidation has not happened. The Connecticut Insurance Department page says that “the timing for the transition to a PHL liquidation proceeding is uncertain but is expected in 2027.” Earlier FAQs (March 11, 2026) said “late 2026 or early 2027”; the SEC prospectus summary of May 1, 2026 said the same. The date has moved back.
  4. The person in charge changed. The petition was filed on May 17, 2024 by then Commissioner Andrew Mais; the December 31, 2025 report is signed by Joshua Hershman, the current Insurance Commissioner, as Rehabilitator.

The case is the Connecticut Insurance Commissioner against PHL Variable Insurance Company, et al., docket X06-UWY-CV-24-6085274-S, on the Complex Litigation Docket at Waterbury. The petition was filed in the Hartford Judicial District, which is why some documents say Hartford and others Waterbury.

Court timeline

DateEventDocument
May 17, 2024Commissioner files petition for rehabilitation of PHL, Concord Re and Palisado ReConnecticut Insurance Department press release, May 20, 2024
May 20, 2024Superior Court enters rehabilitation order and a temporary moratorium; the companies consentedPress release, May 20, 2024
June 25, 2024Court finalizes the moratorium termsMoratorium Order; CID summary
July 21, 2025Rehabilitator moves to ease the moratorium for certain universal life and fixed indexed annuity ownersMotion to Modify Moratorium Order
October 21, 2025Court hearing on the motionOrder of December 24, 2025
December 24, 2025Court approves the modification; no objections remainedOrder Modifying the Moratorium Order
December 31, 2025Rehabilitator reports a standalone plan is not feasible; liquidation order will be neededReport of the Rehabilitator
March 6, 2026Personalized election packages begin to be mailedCID rehabilitation page
April 13, 2026CID holds a virtual policyholder information sessionCID policyholder page
September 30, 2026Third report on liquidation planning: NOLHGA request for proposals under way, initial proposals requested by October 15, 2026, liquidation expected in 2027Rehabilitator's Third Report
On or around November 20, 2026Next update to the court promisedRehabilitator's Third Report

What the moratorium lets you do, by product

The June 25, 2024 Moratorium Order sorts money into the “Guaranteed Account” (the general account plus the market value adjusted guaranteed interest account) and the “Separate Account” (three unit investment trusts registered under the Investment Company Act of 1940). The caps apply to the first; the second is insulated from PHL's general account.

ProductDeath benefitSurrender, withdrawal or loanRecurring payments
Non-variable life insuranceLesser of the benefit or $300,000 from the general accountNot allowedNot applicable
Variable life insuranceFull separate account value, plus guaranteed excess up to $300,000Allowed up to the separate account value; guaranteed-account value cannot be reachedNot applicable
Fixed or fixed indexed annuity (not variable)Lesser of the benefit or $250,000 less earlier general-account paymentsNot allowed; required minimum distributions are permittedContinue if in place on May 17, 2024; no changes to amount or frequency
Variable annuitySeparate account value, plus guaranteed excess up to $250,000 less earlier paymentsAllowed up to the separate account value; guaranteed-account value cannot be reachedSeparate-account payments continue; new payout elections only from the separate account
One person, several contractsNo more than $300,000 combined from the general account across life policies and annuities on that personNot applicableNot applicable

Source: Connecticut Insurance Department, “PHL In Rehabilitation – Summary of Moratorium Order,” June 25, 2024. The Rehabilitator decides how the cap is split across several contracts.

The Department's FAQ of July 9, 2026 adds that for most holders the moratorium “has not had any immediate effect” on recurring payments and death benefits: a non-variable policy with a death benefit of $300,000 or less is paid in full unless other PHL contracts cover the same person. It also says premiums must keep being paid for a policy to stay in force, and claims continue to be processed subject to the limits.

Hardship. The Department says a holder can apply to the Rehabilitator for an exception to the moratorium. Its wording: “There is no assurance that a request will be granted.” The July 9, 2026 status Q&A states that the hardship program is still accepting new applications. A hardship payment on an annuity counts against the $250,000 moratorium cap (FIA FAQ, March 11, 2026), but benefits received before a liquidation order do not reduce guaranty association coverage.

The 2026 election options, and why they are final

After the December 24, 2025 order, about 14,800 owners of eligible non-variable universal life policies and fixed indexed annuities (FIAs) received a personalized election package. Holders had 45 days from the cover-letter date. These are the options the order and the Department's FAQs describe.

ContractOptionWhat it does
Universal life1: keep the policyKeep paying cost of insurance. A death claim pays up to the $300,000 moratorium cap, with the excess becoming an estate claim
Universal life2: reduce to the guaranty limitFace amount falls to the state guaranty limit; the cost of insurance falls with it; no estate claim
Universal life2a: reduce to an amount you pickFace amount falls to the chosen amount; if it stays above the guaranty limit, the excess is an estate claim for a claim before the termination date
Universal life3: surrender for a claimStop paying; fix a claim equal to cash surrender value at the election date plus cost of insurance paid since July 1, 2024
Fixed indexed annuity1: do nothingStatus quo
Fixed indexed annuity2: one-time free withdrawalUp to the contract's free withdrawal amount (for most products 10% of the prior anniversary account value), without surrender charge or market value adjustment
Fixed indexed annuity2 (age 85 or older)One-time distribution of 40% of cash surrender value, up to $25,000
Fixed indexed annuity3: turn on the income riderPayments count toward the $250,000 cap; once activated it cannot be reversed

Sources: Order Modifying the Moratorium Order, December 24, 2025; CID Q&A on the motion to modify, February 6, 2026; CID FIA and universal life election-package FAQs, March 11 and 12, 2026.

The December 24, 2025 order says the election “shall be the irrevocable exercise of rights under the applicable policy or annuity,” and the Department adds that a processed election cannot be changed after the decision date, whether or not PHL later moves to liquidation. The Rehabilitator said in the FIA FAQ that it is “not likely” the moratorium will be lifted entirely before a liquidation order, and that there are no other plans to modify it for access to account value.

What happens at liquidation, with the Rehabilitator's own numbers

A liquidation order with a finding of insolvency triggers the state life and health guaranty associations. Three facts from the Rehabilitator's December 31, 2025 report matter most.

  • Policies end after 30 days except where a guaranty association covers them. The Rehabilitator cites Connecticut General Statutes section 38a-921: thirty days after a liquidation order, all policies terminate except to the extent they are covered by a guaranty association.
  • Loss of the policy itself is a junior claim. A claim for loss of coverage would be junior to the guaranty associations' claims and to unpaid death benefits and surrender values, and the Rehabilitator says such claims “would not ordinarily be paid” where the insolvency is as deep as PHL's.
  • Something above the guaranty limit may still be possible. The Rehabilitator says a liquidation order can be combined with a transaction giving active policyholders “some level of ongoing benefits” above guaranty coverage. Two non-binding proposals from prospective buyers were described in December 2025: an acquisition of PHL with a highly rated insurance partner, and an assumption reinsurance deal. Neither is final, and the September 30, 2026 report says NOLHGA, the national organization of the state guaranty associations, started a request for proposals in the third quarter of 2026.

The Distribution Analysis Summary (April 17, 2026) puts numbers on the excess. An “Estate Claim” is the unpaid part of a death or surrender claim that no guaranty association will cover. The Rehabilitator estimates PHL will pay 34% to 57% of Estate Claims and expects at least the low end. That range does not include anything the guaranty associations pay. For claims on the non-unitized separate account the range is 73% to 95%.

ExamplePHL moratorium paymentGuaranty claimEstate claimEstimated estate recoveryTotal if guaranty pays in full (our arithmetic)
$1,000,000 life policy, death claim before liquidation, $300,000 state limit$300,000$300,000$400,000$136,000 to $228,000$736,000 to $828,000, or 73.6% to 82.8%
$650,000 annuity death benefit, claim between liquidation and the 30-day termination date, $250,000 limit$0$250,000$400,000$136,000 to $228,000$386,000 to $478,000, or 59.4% to 73.5%
$1,000,000 life policy with $0 cash surrender value, claim after the termination date, $300,000 state limit$0$300,000NoneNone$300,000, or 30%

The first two rows use the amounts in the Department's examples; the recovery range is 34% and 57% of $400,000 and the totals are our arithmetic. In the third row the Department's example states there is no estate claim. The Department says it expects guaranty claims in these examples to be paid in full, but that each association makes its own coverage decision. The guaranty limit depends on the state where you live; the Department's FAQ says it is “typically” set by residence when the company is placed in rehabilitation or liquidation, and there is no guaranty association coverage for non-US residents. Our table of annuity guaranty limits for 50 states and DC shows each state's figure, including the combined caps per life that decide how much of a life policy plus an annuity at one insurer is covered.

The balance sheet behind the plan

The audited statutory financial statements of PHL Variable Insurance Company, In Rehabilitation, were filed with the SEC on Form N-VPFS on April 28, 2026 (accession 0001104659-26-050101) for the registered separate account. They show the hole in numbers.

Item (statutory, USD thousands)December 31, 2025December 31, 2024
Total admitted assets3,610,2153,648,331
of which separate account assets2,172,7302,436,013
Reserves for future policy benefits2,677,4702,540,373
Funds held under coinsurance1,095,397806,306
Total liabilities6,029,5675,915,514
Total capital and surplus(2,419,352)(2,267,183)

Source: PHL Variable Insurance Company, In Rehabilitation, Statements of Admitted Assets, Liabilities, Capital and Surplus, Form N-VPFS filed April 28, 2026. The auditor's opinion is unmodified on the statutory basis and adverse on US GAAP.

Other lines in the same filing: a net loss of $135.2 million in 2025 and $2.1 billion in 2024; a reserve credit impairment charge tied to the Concord reinsurance treaty of $138 million in 2025, $776 million in 2024 and $176 million in 2023; risk-based capital at the “mandatory control level” since December 31, 2023; and claims payable above the moratorium limits of $589.9 million at December 31, 2025, against $230 million a year earlier, plus $39.7 million of interest owed on unpaid death claims. The Rehabilitator concluded that substantial doubt exists about the company's ability to continue as a going concern.

Our arithmetic, with a caveat. Take away the separate account on both sides and the general account has assets of $1,437,485 thousand against liabilities of $3,856,837 thousand, or 37.3 cents of statutory asset per dollar of statutory liability. These are book values on a statutory basis, not liquidation values, and the reinsurance and funds-withheld balances make a clean comparison impossible; we show it only because it sits inside the Rehabilitator's 34% to 57% range. The Department's Q&A of July 9, 2026 gives a combined figure for PHL, Concord Re and Palisado Re: capital and surplus of about negative $2.3 billion at December 31, 2025, and cash and short-term investments up from $170.4 million to $553.4 million, which it attributes to the moratorium, premium and investment inflows and reimbursements from the separate account.

The estate also holds claims against third parties. The Rehabilitator says it has preserved claims against entities in PHL's former parent group and its parent, Golden Gate Capital, under a tolling agreement; those entities dispute the claims. Any settlement needs court approval after notice to policyholders. We have not valued these claims and no document we read does.

The SEC filings, if you hold a variable contract

PHL Variable Insurance Company has no SEC filing on EDGAR after a Form 424B3 dated October 14, 2015, but the registered separate accounts that hold variable contracts keep filing. The Form 497J of May 4, 2026 (accession 0001104659-26-054552) was signed by counsel to the Connecticut Insurance Department acting as rehabilitator. The Updating Summary Prospectus for the Phoenix Edge variable annuity, Form 497VPU of April 29, 2026 (accession 0001104659-26-051764), states that during the Moratorium Order PHL “will not pay more than $250,000 from its general account under your annuity contract,” and that the Rehabilitator “does not expect that a liquidation would impact contract owners' investments in the Separate Account.” The money you invested in the variable sub-accounts is not the problem; the guarantees and any fixed-account allocation are.

What a reader can do with this

This is analysis of public documents, not investment, legal or tax advice. The documents point to a short list of things a holder can check.

  1. Find which bucket each dollar is in. Fixed and indexed values sit in PHL's general account or in the non-unitized separate account; variable sub-accounts sit in the insulated separate account. The recovery estimates differ: 34% to 57% for general account claims, 73% to 95% for the non-unitized separate account.
  2. Compare your balance with your state limit. The limit is set by your state of residence and is applied per person per insurer, not per contract. Our guaranty limits table and NOLHGA's own state pages show the number; the association itself decides coverage after a liquidation order.
  3. Keep the paper trail. The Rehabilitator says an annuity holder with cash value above the guaranty limit will have a chance to file a claim for the excess “on the basis of a partial surrender,” but that the mechanism “has not yet been developed.” Account statements, election forms and confirmation letters are the evidence for that claim.
  4. Keep premiums and cost-of-insurance payments current if you want the policy to stay in force, and read the tax notes in any election package: the Department says taxes may be due on the tax-deferred part of an FIA withdrawal.
  5. Do not rely on the old timeline. The expected liquidation date has moved from “late 2026 or early 2027” to 2027, and the next dated event is the Rehabilitator's update on or around November 20, 2026. The Department's PHL page and the court docket are the places to look. The tax side of annuity withdrawals is covered in our deferred annuity taxation page.

For what advisers charge for this kind of review, see what a financial advisor costs for real estate investments.

FAQ

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When a rate, rule or filing behind this page changes: what changed, the one number that matters, and the source to check it yourself.

Sources, read on November 9, 2026: Connecticut Insurance Department, PHL Variable Insurance Company Rehabilitation page and PHL Policy and Annuity Holders page (portal.ct.gov/cid), press release of May 20, 2024, Summary of Moratorium Order of June 25, 2024, General FAQs of July 9, 2026, Fourth Accounting and Status Report Q&A of July 9, 2026, Moratorium modification, FIA and universal life election-package FAQs (February 6, March 11 and March 12, 2026), Distribution Analysis Report Summary of April 17, 2026; Connecticut Superior Court, docket X06-UWY-CV-24-6085274-S: Order of December 24, 2025 and Amended Proposed Order of December 5, 2025, Report of the Rehabilitator of December 31, 2025, Rehabilitator's Third Report on Status of Liquidation Planning of September 30, 2026; SEC EDGAR: PHL Variable Accumulation Account (CIK 934344) Form N-VPFS 0001104659-26-050101, Form 497VPU 0001104659-26-051764, Form 497J 0001104659-26-054552; EDGAR submissions index for CIK 1031223.

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