The Shenandoah Life Insurance Company has been placed in receivership status by the Virginia Insurance commissioner.

Here's the Notice of Receivership...

"On February 12, 2009, pursuant to Title 38.2, Chapters 10 and 15 of the Virginia Code, the Circuit Court for the City of Richmond issued an Order that appointed the State Corporation Commission of the Commonwealth of Virginia as Receiver of Shenandoah Life.

Receivership is a protective measure established under Virginia law to protect policyholders in the event an insurer experiences financial difficulty. The Circuit Court for the City of Richmond found Shenandoah Life in a condition where any further transaction of business would be hazardous to the policyholders, creditors, members, and the public. Both Shenandoah Life and the State Corporation Commission determined that the receivership was necessary to protect the interests of policyholders and creditors.

For additional information regarding the receivership, please visit our web site www.shenlife.com, or you may contact Shenandoah Life at 1-800-848-5433."

We intend to follow Shenandoah Life's progress as it emerges from receivership.  Recognize that this relatively small mutual insurer invested prudently and responsibly based on the support the US Congress gave to publicly held Freddie Mac and Fannie Mae.

Shenandoah Life's relatively small size limits its resources.  The company cannot invest in large scale programs like its larger peers.  It has to place its capital in what it - and most others - would consider safe investments.  The Congress and its finance committees were "sleeping with the enemy." In this instance, they took significant campaign contributions from Freddie and Fannie.  However, they knew about the serious risks to the public - and Shenandoah Life and its policyholders are part of the public - presented by the lending practices and portfolios of these two Behemoths of the mortgage industry.  The power brokers on these committees intentionally withheld that information from the public

Dozens of banks and other financial institutions have failed because of the irresponsible behavior of the financial industry.  You have to place much of the responsibility for those failures at the feet of the Congress.  They failed to exercise adequate oversight (not control).

However, Shenandoah Life is the first life insurance company casualty.  (No, AIG is not a life insurance company.  It owns life insurance companies and they seem to be doing OK.)  Here's the cautionary tale.  The 31 State Guarantee Associations protected and preserved the personal wealth of life insurance policy owners - in this case of Shenandoah Life policyholders.

The federal fools contributed significantly to the unfortunate failure of Shenandoah Life.  They'll beat their chests.  They'll complain about executive compensation.  They'll do everything in their power to divert attention away from their responsibility for these failures.

The life insurance business is - thank God - not yet regulated by the feds.  Pay attention to these kinds of events and voice your concern whenever a Barney Frank tries to stick a finger in your pie.