Executive Life (CA)
Comments Sought on Schedules
Affected participating guaranty associations received last week several Arthur Andersen reports to NOLHGA regarding corrections to the Pre-Closing Shortfall Lump Sum Schedule created pursuant to section 6.4.1 of the Executive Life Enhancement Agreement. The Schedule is a list of covered Executive Life Single Premium Immediate Annuities (SPIAs), Custom Qualified Retirement Annuities (CQRAs) and Allocated Qualified Retirement Annuities (AQRAs) that were terminated before the Executive Life Closing Date due to policyholder death.
Affected guaranty associations with comments regarding their schedules are urged to immediately contact Kevin Stephens of Arthur Andersen (202.862.2566), as the Executive Life Task Force is planning to respond to the California Conservation and Liquidation Office early next week. Affected are the California, Florida, Illinois, Indiana, Iowa, Massachusetts, Minnesota, Ohio, Oklahoma, Oregon, Pennsylvania, South Carolina, Texas, Virginia and Washington guaranty associations.
Task Force Chair - Art Dummer; Staff Contact - Mid-Continent Life (OK)Bid Package Released
On March 23, 1999, the Oklahoma Insurance Department released a Notice for Proposals Relating to Rehabilitation and Bid Package for Mid-Continent Life Insurance Company, in receivership. The bid package seeks offers for the purchase of Mid-Continent in connection with the Oklahoma Department's efforts to rehabilitate the company. Among other matters, the package provides for due diligence reviews to begin on April 5, sealed bids to be submitted by 5:00 p.m. June 4, 1999 and a public opening of bids to be held on June 8 at Mid-Continent's offices. Interested persons may receive a copy of the notice and bid package by calling the Oklahoma Insurance Department at 405.521.2746.
Task Force Chair - Sonya Ekart; Staff Contact - Bill O'Sullivan Centennial Life (KS)Claims Backlog Declining
The claims backlog for the Centennial Health Block has declined dramatically in the first quarter of 1999. The claims inventory, which stood at 57,000 at year-end 1998, was down more than 50 percent by March 31, to 28,000. The average number of claims processed per week has increased 40 percent, from 2,500 per week in January to 3,500 per week in March. Mail receipts have declined 25 percent, from 2,000 per week in January to 1,500 per week in March.
Task Force Chair - Mark Femal; Staff Contact -North Dakota Act Updated
The Governor of North Dakota on March 3 signed into law an updated version of the Life and Health Insurance Guaranty Association Act. The new act, modeled after the 1997 NAIC Model Act, becomes effective Aug. 1, 1999. Although all existing coverage limits remain unchanged, the revised act clarifies the coverages provided. The new act also revises the definition of certain terms, clarifies the annuities included in the association's annuity account, revises the powers of the association, revises the manner in which assessments against member insurers will be made, revises actions the association board may take to aid in the detection and prevention of insolvencies or impairments, authorizes the association to apply to a receivership court to receive disbursement of assets, and provides for a summary document describing the general purposes and current limitations of the association.
Year 2000 Insolvency Contingency Plan Committee
In our continuing efforts to keep you abreast of the activities of the Committee, the following actions have occurred within the past few weeks:
1) An evaluation guide has been mailed to guaranty association administrators to aid them in their efforts at achieving Year 2000 compliance of their guaranty association's operations. The guide provides general instructions on testing hardware and software and provides listings for a number of internet websites that may be accessed regarding Year 2000 issues. The Committee welcomes any comments administrators may have regarding the package. In addition, please forward additional website addresses or comments regarding Year 2000 testing you may have that are not included in the package to the attention of Paul Peterson at NOLHGA. The intent of the Committee is to periodically make these available to guaranty association administrators for their use.
2) As a reminder, administrators should have received the Committee's package dated March 17 that discussed communication efforts that should be undertaken now with your domestic regulators. The Committee would appreciate any feedback you can provide on meetings you have had or the upcoming meetings you may have scheduled with your domestic regulator regarding Year 2000 issues as recommended in the report.
3) As indicated in the March 17 package, the Committee has scheduled meetings with three member companies that have kindly agreed to discuss Year 2000 issues and contingency plans being developed. The primary purpose of these meetings is to (a) obtain a general overview of the member company's year 2000 plans, (b) obtain additional data elements, from an assuming insurer's perspective, to enhance the initial listing developed by the Committee and (c) to discuss the "strike team" concept being considered by the Committee. This concept would create a pool of individuals for use by insolvency task forces to extract the necessary data from an impaired company's records in order for the guaranty associations to fulfill their statutory obligations.
The Committee will continue to keep you informed of its' activities. Please forward any information you may come across regarding the year 2000 issue to the attention of Paul Peterson at NOLHGA.
Committee Chair - Jack Falkenbach; Staff Contact - Paul PetersonCALENDAR/CONFERENCE CALLS
April 5 Coastal States Task Force Conference Call, 10 am EDT
April 5 Centennial Life Working Group Conference Call, 11 am EDT
April 5 Legal Committee Subgroup on Proposed 501(c)(6) Tax Conference Call, 11 am EDT
April 6 Executive Life Altus Litigation Working Group