Fidelity Bankers Life (VA)

Action Required on Settlement

In order to participate in a proposed settlement agreement in the Fidelity Bankers case, guaranty associations participating in the 1993 Supplementary Agreement were e-mailed and faxed instructions regarding actions that need to be taken to effect participation in the Settlement Agreement.

Task Force Chair -John Colpean;   Staff Contact - Statesman National Life (TX)

NOLHGA to File Omnibus Proof of Claim

On November 3, the task force sent all associations a draft omnibus proof of claim to be filed with the liquidator. Guaranty association administrators are urged to complete the certification (included as page two of the package) and to return it to NOLHGA. Guaranty associations should also update and send to NOLHGA a report of their administrative expenses and any claims paid directly for inclusion in the omnibus proof of claim.

Task Force Chair -Neil Rucksdashel;   Staff Contact - Thunor Trust

IFS Liquidator Distributes $2 Million

On November 7, the Liquidator of International Financial Services Life (IFS) wired to NOLHGA $2 million, for the benefit of the 37 guaranty associations participating in the Early Access Agreement. NOLHGA will distribute these funds to participating guaranty associations in proportion to their funding of the IFS assumption reinsurance agreement with Madison National.

In other Thunor news, on October 31, Investors Heritage Life wired $165,765 to NOLHGA for the benefit of the guaranty associations that participated in the Franklin American Life assumption reinsurance agreement.

Task Force Chair -Chuck LaShelle;   Staff Contact - Kentucky Central Life (KY)

Expense Data Requested

Expense data for 3rd quarter 2000 is now being collected. Reporting forms for 3rd quarter expenses were sent out by fax to all affected guaranty associations earlier this week with a noted return date of Friday, November 17th. Those states that have not yet submitted expense data for the 1st and 2nd quarters of 2000 should send that information to NOLHGA at this time so that the information can be compiled and submitted to the Receiver's office. Associations that have no expenses to report for that period should so indicate that on the form. Duplicate reporting forms are available upon request.

Please do not hesitate to call if you have any questions. Expense information should be addressed to NOLHGA, Attention Karen Early, 13873 Park Center Road, Suite 329, Herndon, VA 20171. If you prefer, you may send them by fax to 703.481.5209.

Task Force Chair -John Colpean;   Staff Contact - Joni Forsythe Summit National Life (PA)

NOLHGA Served With Subpeona

On November 7, 2000, NOLHGA was served with a subpoena duces tecum requesting the production of certain documents relating to Summit National Life Insurance Company ("Summit") and Equitable Benefit Life Insurance Company ("EBL"). The subpoena was issued by counsel for PriceWaterhouse L.L.P. in connection with certain asset recovery litigation which was initiated by the Summit Liquidator and is pending in Pennsylvania state court. NOLHGA is not a party to the litigation.

Task Force Chair -Tad Rhodes;   Staff Contact - Joni Forsythe

Court finds PA P&C Fund to be a Governmental Entity

On June 30th of this year, the United States District Court for the Eastern District of Pennsylvania issued an opinion holding that the Pennsylvania Property and Casualty Insurance Guaranty Association ("PPCIGA") is a governmental entity subject to claims for violation of constitutional rights. This case arose out of a wrongful death action against a doctor insured by then insolvent PIC Insurance Group, Inc. ("PIC"). Because of PIC's insolvency, PPCIGA provided defense for the insured in the wrongful death action. That action resulted in judgment for the plaintiff in the approximate amount of $685,000. Thereafter, the plaintiff made demand upon PPCIGA for $200,000 representing the coverage limit on the insured's malpractice policy.

PPCIGA denied the claim stating that the association is directed, by statute, to offset any amounts paid to the plaintiff by other insurers, and that the amount of payments already received by the plaintiff from other insurers under medical and life insurance policies totaled more than the $200,000 coverage limit on the policy issued by PIC. The plaintiff then filed suit under federal law (42 U.S.C.Û 1983) alleging that PPCIGA acted under color of state law to deprive her of constitutionally protected property rights. PPCIGA responded with the filing of a motion for summary judgement seeking dismissal of the claim on the grounds that the Association is not a state actor subject to constitutional claims under Û 1983.

In its opinion dated June 30, 2000, the district court denied the Association's motion for summary judgment, finding that PPCIGA is a governmental entity subject to constitutional scrutiny. The June 30th decision was reported and is available on Westlaw.

The Association filed a motion for reconsideration of the decision, and the NCIGF submitted an amicus brief in support of reconsideration. The case was ultimately settled but the settlement did not result in the vacation of the decision.

  Staff Contact - Joni Forsythe

ETC

Aimee Frye

NOLHGA welcomes Aimee Frye, who joined NOLHGA on November 6 as administrative assistant to the Law Department. Aimee was most recently with marchFirst as the Group Coordinator for the Technology Services Group. Aimee will support Bill O'Sullivan, Joni Forsythe and the attorney who assumes a currently vacant position.

Karen Early will continue to support Meg Melusen, and has assumed new responsibilities of providing support to Paul Peterson and Pete Marigliano, and for membership records and purchasing.

CALENDAR/CONFERENCE CALLS

Nov. 14-15NOLHGA MPC Meeting, San Antonio, TX

Nov. 15-17Joint NOLHGA, NCIGF, IAIR Seminar, San Antonio, TX