Is my MYGA balance at risk due to possible ransomware attack?

[dante56]

Client and Agent Portals at Oceanview Life and Annuity website has been down since Friday. Website message:

"Attention: Due to an infrastructure outage, Client Portal is currently down. We will notify you once we have resolved the issue"

This has been going on for 5 days now. Call center cannot access any customer records or data. Can't process any transactions. Bluestone the Agent who sold the MYGA that many of us bought has no clue about what is going on - the Oceanview Agent portal is also down.

Ransomware attack? Seriously Hacked website?

Anyone else worried about their cash sitting in the Oceanview MYGA?

[Tom_T]

Annuties are protected by the state. The amount varies by state, but I think they all protect at least $250K.

If it's a hacking issue, you'll have to be patient.

[Stinky]

I expect that you’ve already tried calling the Oceanview client service lines.

And I expect that the client service representatives have no more information than the website says.

I searched the web and there’s nothing more I could find about Oceanview except for a complaint on an agent blog about “systems down”.

One other place you could get in touch with is the Arizona Department of Insurance. Arizona is the primary regulator of Oceanview, since the company is incorporated there. I expect that (a) the company has already told AZ that there’s a problem, and (b) there’s nothing more that AZ can tell you about the situation. But on the off chance that either of my suppositions are incorrect, it’s probably worth a call.

I really doubt that there’s a financial problem with the company. They were just reviewed and upgraded by AM Best.

But there’s certainly an IT problem. A pretty major one.

[LadyGeek]

This thread is now in the Investing - Theory, News & General forum (general discussion).

(Thanks to the member who reported the post and explained what's wrong.)

[dante56]

Just received the following email forwarded by Bluestone:

“On November 2, Oceanview Life and Annuity Company’s (“Oceanview”) third party administrator, Infosys McCamish Systems (“McCamish”) became aware of a cybersecurity incident that impacted its ability to serve its clients, including Oceanview. Oceanview has its policy administration (applications, surrenders and withdrawals) and agent appointments conducted by McCamish. We understand that McCamish promptly took steps to isolate and lock down its systems. McCamish has retained a third-party cybersecurity firm to confirm the scope of the event and to remediate it. That investigation is ongoing. The McCamish systems that were locked down include all of the systems that administer policies and agent protocols for Oceanview. Accordingly, Oceanview has been unable to process policies and agent administration since the shutdown of the systems by McCamish.

McCamish's investigation is in the early stages and McCamish does not have answers at this time about the impact to specific customers' data, including with respect to Oceanview’s agents and policyholders. Due to the severity of the incident and the complexity of McCamish’s network the restoration process is taking longer than originally anticipated. McCamish now believes that they will not be back to normal operations until at least November 14, 2023…………….”

[Stinky]

Just received the following email forwarded by Bluestone:

“On November 2, Oceanview Life and Annuity Company’s (“Oceanview”) third party administrator, Infosys McCamish Systems (“McCamish”) became aware of a cybersecurity incident that impacted its ability to serve its clients, including Oceanview. Oceanview has its policy administration (applications, surrenders and withdrawals) and agent appointments conducted by McCamish. We understand that McCamish promptly took steps to isolate and lock down its systems. McCamish has retained a third-party cybersecurity firm to confirm the scope of the event and to remediate it. That investigation is ongoing. The McCamish systems that were locked down include all of the systems that administer policies and agent protocols for Oceanview. Accordingly, Oceanview has been unable to process policies and agent administration since the shutdown of the systems by McCamish.

McCamish's investigation is in the early stages and McCamish does not have answers at this time about the impact to specific customers' data, including with respect to Oceanview’s agents and policyholders. Due to the severity of the incident and the complexity of McCamish’s network the restoration process is taking longer than originally anticipated. McCamish now believes that they will not be back to normal operations until at least November 14, 2023…………….”

I’m glad that Blueprint forwarded the message to you.

McCamish is a name that I recognize as an administrator of life insurance and annuity policies. They work for a number of companies, administering either all or a portion of a company’s policies.

It’s certainly possible that other life insurers are affected by this McCamish issue too.

Please let us know as you hear more.

[nisiprius]

Annuties are protected by the state. The amount varies by state, but I think they all protect at least $250K.

Sort of, but let me flesh that out a bit.

The protection is against "insolvency" (insurer goes bankrupt) and I wonder how that would work out in other kinds of crisis.

You're protected by your own state's guaranty association, not by that of the insurer's state.

1. Go to nolhga.com.
2. Skip the generalities and go to the particulars for your state:
   Policyholder information >> Choose Your State Association >> Go >> FAQs
3. Skim the questions and read the answers.

The state guaranty associations are not agencies of the state, and they don't have a state-funded pot of money. They are basically consortiums, governed by state law. The details vary but they follow a similar pattern. Generally insurers are required to belong to the state guaranty association as a condition of selling insurance in the state.

What it provides is decribed by NOLHGA as a "safety net." It specifically is not "insurance," and it doesn't spell out exactly what the association is required to do in the event of an insolvency. What happens exactly in each insolvency is determined case-by-case. Often, another insurer takes over and services the policies from the failed insurer. There's a weird little provision that someone referred to as the "Moody's cramdown." If your policy is too generous, the insurer who takes it over doesn't need to honor the full rate.

There isn't any central pot of money. The rescue operation is funded by passing the hat among the insurers in the guaranty association.

One of the provisions of most? all? state laws is that insurers are not allowed to tell you about this protection. Or at least they are not allowed to mention in ads, or use it as an incitement for sales. This is to prevent "moral hazard." They want you to think that your only protection is the claims-paying ability of the insurer you chose. How this works out in practice varies. Some insurance agents get freaky and evasive if you ask about it. One person in the forum who said he was an insurance agent said that in his state every buyer gets a brochure about it, but only after they've bought the policy.

On the NOLHGA website, "Fact and Figures >> Impairments & Insolvencies" will get you a list of insolvencies. This is evidence that (unlike SIPC protection), insurance companies do become insolvent, several every year, and the guaranty associations are called in. A few recent ones:

2023 Southland National Insurance Corporation NC
2022 North Carolina Mutual Life Insurance Company. NC
2022 Time Insurance Company. WI
2020 Senior Health Insurance Company of Pennsylvania PA
2019 Senior American Insurance Company. PA
2019 Pavonia Life Insurance Company of Michigan MI
2019 Colorado Bankers Life Insurance Company NC
2019 Bankers Life Insurance Company NC
2019 Northwestern National Insurance Company of Milwaukee WI

[nalor511]

Annuties are protected by the state. The amount varies by state, but I think they all protect at least $250K.

If it's a hacking issue, you'll have to be patient.

CA is only 80% of up to $250k so you'd lose 20%

[Cheego]

Sort of, but let me flesh that out a bit.

Nisiprius, you are such an incredible resource. Thank you for what you do.
About 8% of my investable assets are in two MYGA's, but I'm hesitant to add more knowing that the protections seem a bit questionable.

I'm curious, would you put money into a MYGA?

[nisiprius]

Sort of, but let me flesh that out a bit.

Nisiprius, you are such an incredible resource. Thank you for what you do.
About 8% of my investable assets are in two MYGA's, but I'm hesitant to add more knowing that the protections seem a bit questionable.

I'm curious, would you put money into a MYGA?

I wouldn't be afraid of the risk (and I'm fairly risk-average). I haven't found them to be that much more appealing than bank accounts, and I am very "complexity-averse" and don't want to adding to the short list of institutions where we "have money."

But we own annuities and are thus relying on the safety of the insurers and the state guaranty association. We're somewhere near the protection cap, as a matter of fact. My personal impression is that the protection from the state guaranty associations looks "better than SIPC, not as good as FDIC." It's just important to understand that a) there IS a "safety net," contrary to what they want you to think, but b) it's not anything like FDIC protection.

I don't know if the financial strength ratings are reliable, but I also feel that life is too short to monkey around with any policy that isn't rated somewhere in the A range by all four of the big ratings agencies: A. M. Best, Fitch, Moody's, and S&P. Such policies are not hard to find.

[Kenkat]

McCamish is a name that I recognize as an administrator of life insurance and annuity policies. They work for a number of companies, administering either all or a portion of a company’s policies.

It’s certainly possible that other life insurers are affected by this McCamish issue too.

Agree, McCamish is a pretty good sized player in the life/annuity policy administration space. They are owned by InfoSys, a very large multinational company based in India. I’d say it’s 100% certain other insurers are on their platform but I don’t know the extent of any exposure.

[Stinky]

McCamish is a name that I recognize as an administrator of life insurance and annuity policies. They work for a number of companies, administering either all or a portion of a company’s policies.

It’s certainly possible that other life insurers are affected by this McCamish issue too.

Agree, McCamish is a pretty good sized player in the life/annuity policy administration space. They are owned by InfoSys, a very large multinational company based in India. I’d say it’s 100% certain other insurers are on their platform but I don’t know the extent of any exposure.

If there’s anything “good” about this outage, it’s that McCamish is focused on policy administration, not on the actual handling of assets.

Therefore, I’d expect that the actual cash and invested assets of Oceanview haven’t been touched by this issue. That is, policyholder money should be safe.

This breach has hit the press. Here are a couple of articles confirming the Infosys problem that I found with a quick google search. The second article below calls this a ransomware event.

https://business.outlookindia.com/amp/s ... operations

https://www.cybersecurity-insiders.com/ ... nry-schein

OP, please keep us posted as to what you hear from Oceanview.

[Cheego]

I wouldn't be afraid of the risk (and I'm fairly risk-average). I haven't found them to be that much more appealing than bank accounts, and I am very "complexity-averse" and don't want to adding to the short list of institutions where we "have money."

But we own annuities and are thus relying on the safety of the insurers and the state guaranty association. We're somewhere near the protection cap, as a matter of fact. My personal impression is that the protection from the state guaranty associations looks "better than SIPC, not as good as FDIC." It's just important to understand that a) there IS a "safety net," contrary to what they want you to think, but b) it's not anything like FDIC protection.

I don't know if the financial strength ratings are reliable, but I also feel that life is too short to monkey around with any policy that isn't rated somewhere in the A range by all four of the big ratings agencies: A. M. Best, Fitch, Moody's, and S&P. Such policies are not hard to find.

Thank you for sharing your thoughts on this.

[bpg1234]

Any latest info on what is happening here as the Oceanview site is still down and the CSR I spoke to had nothing to add other than saying it was an IT issue that is being worked on? Thanks in advance.

[Stinky]

The Oceanview site still seems to be down this morning. It sounds like OP first got the "site is down" message on Friday, November 3. If that's true, then it's been 17 calendar days so far.

One of the trade publications I follow identified TIAA as another company that has been affected by this breach, for at least part of their business. They said that about 34 insurers are on the McCamish system. I don't know if any other life insurers have had customer access affected by the ransomware attack (I was blocked by the article's paywall).

Have any of you Oceanview customers gotten any further communication from the company?

[protagonist]

Sort of, but let me flesh that out a bit.

Nisiprius, you are such an incredible resource. Thank you for what you do.
About 8% of my investable assets are in two MYGA's, but I'm hesitant to add more knowing that the protections seem a bit questionable.

I'm curious, would you put money into a MYGA?

I'm curious too.... (I mean that, since I know very little about annuities)...

At today's TIPS yields, why would you choose a MYGA over TIPS, which provide you a guaranteed solid REAL return at essentially no cost, state tax exemption, and the security of the US Treasury (vs. insurance companies, for whatever "A ratings" are worth)?

[Stinky]

At today's TIPS yields, why would you choose a MYGA over TIPS, which provide you a guaranteed solid REAL return at essentially no cost, state tax exemption, and the security of the US Treasury (vs. insurance companies, for whatever "A ratings" are worth)?

Four reasons quickly come to mind -

—- Deferral of taxable income until funds are withdrawn

—- Certainty of payment of all principal and interest at a certain defined date, without market value adjustment

—- Availability of “free partial withdrawals”, often 10% of the value, every year with no market value adjustment, on most products

— Death benefit of full accrued account value, without market value adjustment, on most products.

There are pluses and minuses for each type of investment. MYGAs are no exception to this general rule.

[sycamore]

FYI, the situation is also mentioned in another thread
Extended system outage - T Rowe Price Deferred Compensation accounts.

[CHRISTIANMCH]

December 4, 2023 - Oceanview Life & Annuity - Update regarding the service disruption caused by the cybersecurity incident at Infosys McCamish Systems ("McCamish"), the third-party administrator of Oceanview Life and Annuity Company. Oceanview has resumed processing all disbursements, including commissions, surrenders and withdrawals on a daily basis. Agent & Client portal remain down, and the Infosys Call Center cannot presently provide policy-level information. Oceanview continues to receive and process new business applications via fax.

[aruba joe]

Oceanview portal is now open.

[bpg1234]

Calls today result in no answer and then a telco disconnect. Spoke to a rep on Friday and she indicated the portal would be back up later that morning but nothing but crickets to this point. I've been assured there has been no impact to funds but their handling of this has been a disaster. If client portal is up I'm not seeing it as still says down. EDIT: went in with a different browser and did get in! Hallelujah! Hopefully this is all behind us.