Kentucky Central Life (KY)

Plan Termination Issues

Administrators of associations that have the statutory authority to issue "alternative policies" should have recently received a package containing form documents for seeking commissioner approval of the restructured Jefferson-Pilot policies as "alternative policies." Any questions concerning the package should be directed to KCL Task Force Chair John Colpean (517.487.2525) or Task Force Legal Counsel Kevin Griffith (317.237.1179).

In anticipation of the May 31 Plan termination, the Task Force's real estate consultant has been instructed to review the remaining KCL real estate to determine whether the PGAs should exercise any rights to acquire the remaining properties. A KCL working group has scheduled a meeting in Herndon for April 25 to discuss these issues and to prepare for the May 31 Plan termination.

In other KCL news, in order to minimize the amount of cash transferred among participating guaranty associations, the distribution of the Jefferson-Pilot holdback has been deferred to the end of the plan. The funds are being held at interest in the NOLHGA/KCL escrow account, and will be used to partially fund the end of plan true-up. Soon after the May 31 plan termination, Jefferson-Pilot will supply a final accounting of the amount of policy loan support to be returned to GAs, and the amount of account value true-up due from GAs.

Task Force Chair - John Colpean;   Staff Contact - Joni Forsythe American Chambers Life (OH)

Claims Payment Begins

The American Chambers Receiver on April 17 informed the Task Force that American Chambers had begun paying claims April 14. Previously, American Chambers had been processing but not paying claims. As of April 7, there were approximately 22,000 processed but unpaid claims totaling $6 million. The Receiver expects to reduce the inventory of processed but unpaid claims in about two weeks.

On April 19, the Task Force sent a recommendation to the MPC Executive Committee to approve a service agreement with Antares Management Services, a subsidiary of Medical Mutual of Ohio. Under the proposed agreement, Antares would process claims and provide other policy service for participating guaranty associations, should they become triggered by the anticipated liquidation order for American Chambers.

An audit of American Chambers claims has been scheduled for the week of April 24.

Task Force Chair - Chuck Gullickson;   Staff Contact - Centennial Life (KS)

On April 20, the 36 participating guaranty associations, the Centennial Life Receiver, New Era Life and Philadelphia American Life (a subsidiary of New Era) closed an assumption reinsurance agreement. Under the agreement, New Era Life and Philadelphia American Life assumed the Centennial "Other Block," consisting of individual life insurance policies and guaranteed renewable health insurance contracts. The Centennial Receiver funded all but $15,000 of the $800,000 at closing as early access distributions. The Michigan and South Carolina guaranty associations, who did not participate in the early access agreement, funded the remaining $15,000.

In other Centennial news, the Centennial Receiver has requested that all those guaranty associations handling health claims and litigation contact him as soon as possible.

Task Force Chair - Mark Femal;   Staff Contact -

CALENDAR/CONFERENCE CALLS

April 24 MPC Executive Committee Teleconference, 2:00 pm ET

April 25 KCL Working Group Meeting, Herndon, VA

April 26 Emerging Issues Committee Teleconference, 10:00 am ET

April 26 Amer. Chambers Working Group Teleconference with Receiver, 3:00 pm ET

April 26 National Affiliated Investors Life, Hearing on Liquidation Order and Assumption Agreement with Citizens Security, Alexandria, LA

April 27 American Chambers Task Force Teleconference, 3:30 pm ET

April 27 Legal Committee Federal Issues Subgroup, Herndon, VA

April 27 Communications Committee Teleconference, 2:00 pm ET

May 2 Compensation Committee Meeting, Tysons Corner, VA

May 2 Audit Committee Meeting, Tysons Corner, VA

May 3 Board of Directors' Meeting, Tysons Corner, VA

May 9 Legal Committee Meeting, Orlando, FL

May 17-19 Members' Participation Council Meeting, Minneapolis, MN

July 20-21 NOLHGA Legal Seminar, Boston, MA