If the Escrow Shield Plus contract is terminated early due to a claim reducing the balance amount to zero, there is no penalty. The full amount of the account, including accrued interest, is released in full.
If the contract is terminated voluntarily for a reason unrelated to the merger agreement, a negative market value adjustment may apply. This is necessary because AXA Equitable makes longer duration investments at the time of entering into the funding agreement and the underlying assets could suffer a loss if liquidated early. AXA Equitable is willing to assume this risk for depletions resulting from claims but not for voluntary terminations unrelated to the merger agreement.
The market value adjustment, if any, may reduce the account balance of the contract, including the principal amount that is to be distributed to the appropriate parties upon the early termination of the contract.
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Posted in: Services: Escrow Shield Plus