In 1978, Mark Sanford and William Blackburn were working as stockbrokers in Louisville, Kentucky when they decided to form their own company, Transmark USA, Inc. In 1984, Transmark purchased Guarantee Security Life Insurance Company (GSLIC) of Jacksonville, Florida. The two men moved to the Sunshine State, Blackburn taking charge of daily operations, while Sanford managed the investment portfolio.
GSLIC's primary products were deferred annuities and life insurance policies. The firm marketed these products through a national sales force of over 16,000 highly commissioned insurance agents. However, customers were attracted to the products by the promised 10% interest rate, which was guaranteed for the first year. According a sales brochure, customers were also protected against loss of their investment: "The principal is fully guaranteed. It is not subject to losses created by market fluctuations."
Customers soon found there were drawbacks to the policies. The interest rates paid after the first year dropped dramatically. However, annuitants were discouraged from withdrawing their money by high cancellation penalties ($1,000 for a $10,000 investment).
Between 1984 and 1991, the company grew from less than $100 million to almost $1 billion in assets and had about 57,000 policyholders in 42 states. In 1991, however, the company went insolvent and stopped writing new policies. Consequently, the State of Florida established a receivership to take control of the company.
Famous quotes containing the words guarantee, security, life, insurance and/or company:
“A wise architect observed that you could break the laws of architectural art provided you had mastered them first. That would apply to religion as well as to art. Ignorance of the past does not guarantee freedom from its imperfections.”
—Reinhold Niebuhr (1892–1971)
“The most disgusting cad in the world is the man who, on grounds of decorum and morality, avoids the game of love. He is one who puts his own ease and security above the most laudable of philanthropies.”
—H.L. (Henry Lewis)
“We are all conceived in close prison; in our mothers’ wombs, we are close prisoners all; when we are born, we are born but to the liberty of the house; prisoners still, though within larger walls; and then all our life is but a going out to the place of execution, to death.”
—John Donne (c. 1572–1631)
“... business training in early life should not be regarded solely as insurance against destitution in the case of an emergency. For from business experience women can gain, too, knowledge of the world and of human beings, which should be of immeasurable value to their marriage careers. Self-discipline, co-operation, adaptability, efficiency, economic management,—if she learns these in her business life she is liable for many less heartbreaks and disappointments in her married life.”
—Hortense Odlum (1892–?)
“The Bermudas are said to have been discovered by a Spanish ship of that name which was wrecked on them.... Yet at the very first planting of them with some sixty persons, in 1612, the first governor, the same year, “built and laid the foundation of eight or nine forts.” To be ready, one would say, to entertain the first ship’s company that should be next shipwrecked on to them.”
—Henry David Thoreau (1817–1862)