The documents posted on this website are intended to provide you with information concerning the Rehabilitator's Plan of Rehabilitation for CML. As a policyholder, vendor, employee or other stakeholder in CML, no action is required of you. You may consult with any advisor that you feel appropriate. The documents on the website, including the (1) Petition To Approve Rehabilitation Plan For CML, (2) Plan Of Rehabilitation For CML, and (3) Disclosure Statement In Support Of Plan Of Rehabilitation For CML, provide a description of the Plan and contemplated transactions ("Transactions"), so that you can make decisions that are best for you.

Rehabilitation under Article 74 of the Insurance Law is a judicial proceeding in which the Rehabilitator takes possession and control of an insurance company’s property and business and continues its operations under the supervision of the Court. The goal of the proceeding is to remove the causes and conditions that led to the rehabilitation so that the insurer, in this case CML, may return to the market as a financially healthy insurer.

The Rehabilitator is seeking Court approval of the Plan of Rehabilitation for CML that will convert CML from a mutual insurer to a stock life insurer, recapitalize CML under new ownership, and result in the termination of the rehabilitation proceeding. The Rehabilitator prepared the documents filed with the Court and posted on this website to assist the Court, policyholders and other stakeholders in their understanding of the material terms of the Plan. The Court’s approval of the Plan does not require any voting; however, you may have the right to file a written objection to the Plan pursuant to the terms and conditions set forth in the Plan’s scheduling order that has been approved by the Court (“Scheduling Order”).

The Plan accomplishes the goals of the rehabilitation proceeding by removing the causes and conditions of the financial impairment that caused CML to enter rehabilitation, as set forth in the points below.
  
• The Plan provides for a capital contribution of at least $100 million and up to $125 million (“Contribution”) into CML and its subsidiary, Columbian Life Insurance Company (“CLIC”), which is in rehabilitation in the state of Illinois, and the purchaser’s commitment to maintaining the companies’ surplus going forward, which will stabilize the companies’ financial condition. The Rehabilitator evaluated multiple possibilities to sell the companies and restore financial health and determined that the Transactions represented the best option.

• The purchaser and its affiliates bring substantial operational, investment, and strategic expertise that will create new business opportunities for CML.

• The Plan will not reduce insurance benefits or otherwise impact the insurance terms of the policyholders’ policies, such as premiums, coverage and claims.

• The Plan will not impair the claims of creditors, vendors, and other contractual counterparties. All such claims will be processed and paid in the ordinary course.

• The Plan will help ensure the continuity of the businesses of CML, CLIC and all other subsidiaries, and maintain a presence in the Triple Cities, New York area.

• If the Plan is not approved, the most likely outcome would be to convert the rehabilitation proceeding to a liquidation, in which case CML would cease operating and most policyholder claims would be transferred to state guaranty associations and paid up to applicable statutory limits.

The purchaser is JAB Insurance US Holdings, Inc., an Affiliate of JAB Holding Company (“JAB”), a privately held global investment firm with more than $70 billion in assets across public and private consumer and insurance businesses. This includes material investments of permanent capital in the insurance sector. On February 5, 2025, JAB announced the acquisition of Prosperity Life Group, which is comprised of Prosperity Life Group Insurance Companies and Prosperity Asset Management (“Prosperity”). Prosperity has over $25 billion of assets and will represent a key part of JAB’s strategy to build a global life insurance platform at scale financed with permanent capital.

The Rehabilitator submits that the policyholder Equity Interests are without value due to CML’s financial condition. By way of background, CML, as a mutual insurance company, is currently owned by its policyholders. The policyholders’ ownership interests in CML are defined in the Plan as "Equity Interests" and include the right to receive dividends and other distributions as determined by CML’s board of directors. Equity Interests also include the right to participate in a distribution of assets of CML if CML were to enter liquidation and there were sufficient assets to first pay all claims in higher priority classes in full. Lastly, Equity Interests entitle policyholders to vote on matters submitted to policyholders, such as the election of directors. 

The Plan would convert CML to a stock life insurer and authorize the issuance of new capital stock to the Purchaser in exchange for the Contribution. Thus, as of the closing and the Effective Date, CML will operate as a stock life insurance company and all prior Equity Interests held by policyholders will be discharged and extinguished without any distribution in exchange therefor.

The Rehabilitator submits that the Equity Interests are without any value due to CML’s financial condition. Absent approval of the Plan and the Transactions, the Rehabilitator anticipates that CML would not have sufficient capital to pay claims and continue operations. In addition, due to its distressed financial condition, CML has not declared dividends since 2020 and there is no realistic prospect of the policyholders receiving a dividend in the foreseeable future.  

CML is in a rehabilitation proceeding that is governed by Article 74 of the Insurance Law. Article 74 vests all authority to approve rehabilitation plans in the Court. Certain creditors may be able to submit objections to the Court, but Article 74 does not contemplate voting by any creditor class.

Prior to the proposed Plan, the Rehabilitator and her advisors considered other potential restructuring options, including a solvent runoff or a liquidation of CML.

Based on a financial analysis performed during the rehabilitation proceeding, the Rehabilitator concluded there were insufficient assets to conduct a runoff of CML’s liabilities.

The Rehabilitator considered converting the proceeding to a liquidation, but concluded it would not be in the best interests of policyholders. In a liquidation, the liquidator would trigger guaranty association coverage that would provide a minimum level of benefits to policyholders, but would not fully cover all policyholders. In addition, the liquidation of CML would likely impair its ability to meet financial obligations to its subsidiary, CLIC. This risk stems from intercompany arrangements between CML and CLIC that would either be delayed or perhaps not performed if CML were in liquidation.

Following extensive review of such alternatives and arm’s length negotiations and discussions, the Rehabilitator determined that the proposed Contribution from JAB is the best option to restore CML’s financial health and protect insurance benefits for CML's and CLIC's policyholders. 

If the Plan is not approved, then the Transactions contemplated by the Plan will not occur, and CML will not receive the Contribution. However, the rehabilitation proceeding would continue to permit the Rehabilitator to assess next steps. As noted above, conversion of CML to a liquidation is the most likely outcome, but the Rehabilitator would explore whether there are any other parties interested in investing in CML or whether a runoff scenario could be implemented.

A new Notice of Plan Approval Hearing was sent out because the Court has amended the Plan Scheduling Order. The Amended Plan Scheduling Order changes the date upon which the Court will hold a hearing and the date by which you can file any response that you might have to the Plan proposed by the Rehabilitator, as discussed in the following FAQ.

The Amended Plan Scheduling Order sets forth the timetable for the Court to consider and approve the Plan, including the date on which the Court will hold a hearing, which is May 4, 2026 (rescheduled from March 17, 2026). If the Court approves the Plan, then implementation of the Plan would be completed at the Effective Date, as set forth in the Plan.