American Chambers Life Insurance Company (Ohio)
Distribution Made to GAs
This week NOLHGA distributed $952,124.71 to the American Chambers affected guaranty associations. The funds generally represent amounts held by Antares (NOLHGA’s TPA) on behalf of the guaranty associations and include claim refunds, subrogation recoveries, voided checks, unused drug card payments, and premiums collected. The task force’s TPA/Claims Subgroup worked with Antares to reconcile amounts collected in each of these categories. This distribution consists of amounts accumulated by Antares through January 31, 2002. Funds received by Antares after January 31 will be distributed to the guaranty associations at a later date.
Task Force Chair - Chuck Gullickson; Staff Contact - Kentucky Central Life Insurance Company (Ky.)Court To Rule on Summary Judgment Motions in Mid-Central Litigation
On June 20, 2002, the Franklin Circuit Court heard oral argument with respect to pending cross motions for summary judgment filed in connection with the Mid-Central litigation. The court has not yet issued a ruling, but a decision is expected later this month.
This litigation was initiated by certain shareholders of Mid-Central Investment Company, Inc., a non-operating subsidiary of KCL. The shareholders seek to recover in excess of $13 million against the assets of Mid-Central, from which they argue they are entitled to be paid as Mid-Central’s preferred shareholders. The liquidator rejected the plaintiffs’ demands on the grounds that KCL and Mid-Central were operated as a single business enterprise and that the assets of Mid-Central should accordingly be consolidated into the KCL estate and distributed in accordance with the statutory priority scheme.
Throughout the course of the liquidation proceedings, the liquidator has consistently viewed this subsidiary as an asset of the KCL estate and has fought all efforts by the shareholders to divert funds from the estate to pay their claims ahead of policyholder-level claims. At the request of the liquidator, NOLHGA, the Illinois and Texas life and health insurance guaranty associations, and the Kentucky Public Employees Retirement Fund intervened in the proceedings for the purpose of supporting first the liquidator’s request for transfer of the case to the liquidation court and, ultimately, the liquidator’s motion for substantive consolidation of Mid-Central assets into the KCL estate. In June 1998, the case was transferred to the liquidation court and procedurally consolidated with the ongoing liquidation proceedings.
In January 2001, the liquidator filed a motion for summary judgment on the issue of substantive consolidation. Shortly thereafter, NOLHGA and the Illinois and Texas associations filed a joint response supporting the liquidator’s motion. The Mid-Central shareholders have also filed a motion for summary judgment on their claims.
At the June 20 hearing, the court ruled that the matter would be held open for a period of 15 days to permit the filing of supplemental pleadings in light of the fact that NOLHGA and the Illinois and Texas associations were not provided required notice of the hearing. On July 3, a brief statement was filed by NOLHGA and the Illinois and Texas associations confirming support for the liquidator’s position on substantive consolidation. The briefing is now complete, and the parties await the decision of the court.
Task Force Chair - John Colpean; Staff Contact - Joni ForsytheMPC Meeting Hotel Deadline Extended
The cut-off date for hotel reservations for the next MPC meeting, which will be held August 13 and 14, 2002, at the Drake Hotel in Chicago, has been extended to Friday, July 12. Today is the last day the NOLHGA room block will be held. Attendees can still receive the NOLHGA room rate of $181 a night after the deadline passes, but only if rooms are available. Any attendees who have not yet made hotel reservations for the MPC meeting or the 11th Annual Legal Seminar, which will be held at the Drake Hotel on August 15 and 16, should do so today. Reservations can be made directly with the Drake Hotel by calling 312.787.2200. When making your reservation, be sure to mention “NOLHGA” to ensure the NOLHGA room rate.
The Web page for the August MPC meeting is now on-line. The page includes a preliminary meeting schedule and general session agenda for the MPC meeting (in PDF format), as well as general meeting information. Status reports and other meeting materials, including an updated schedule, should be posted later this month.
If you are planning to attend the August MPC meeting, we encourage you to register on-line at the meeting Web page as soon as possible. Meeting attendees who also plan to attend the Legal Seminar need to register for that event separately by going to the seminar Web page and downloading the registration form.
If you have any trouble accessing the MPC meeting Web page, please contact Bryan Owen at [email protected] or 703.787.4112. Questions concerning the MPC meeting should be directed to Karen Early at [email protected] or 703.787.4101.
Staff Contact -Guaranty Association Law Summaries Updated
NOLHGA’s law summary reports for state guaranty associations were updated on July 2 and are available at the “State Information” section of the NOLHGA Web site. The summaries can be viewed and printed by selecting a specific report from the “State Guaranty Laws and Provisions” drop-down menu, which lists the reports by topic. Users can also generate individual state reports by choosing a state from the “State Guaranty Association Pages” drop-down menu.
As reported in the June 21 issue of the NOLHGA Wire, the “State Information” section of NOLHGA’s Web site was recently upgraded to offer users more flexibility in locating specific state laws and provisions. The upgraded site also provides users with state guaranty association contact information, and each state guaranty association page contains a link to the corresponding state insurance department.
Staff Contact -GA Contact Info
The Arkansas Life & Disability Insurance Guaranty Association has a new address. The association’s new contact information is:
Arkansas Life & Disability Insurance Guaranty Association
1023 West Capitol Avenue, Suite 2
Little Rock, AR 72201
Phone: 501.371.2776
Fax: 501.371.2774