Executive Life Insurance Company
THE ARTHUR ANDERSEN report summarizing its review of the Aurora Seventh installment bill will be sent April 6 to administrators of the participating guaranty associations. No discrepancies were reported which might cause the associations to contest the billing. Also included in the mailing are instructions for payment and payment confirmation forms. Aurora must receive payment by April 30. Administrators should have received in February a copy of the detailed billing from Aurora showing the amount due from their associations.
Task Force Chair -- Art Dummer; Staff Contact -NOLHGA Files Comments on Proposed DOL Regulations
At the request of the American Council of Life Insurance, NOLHGA filed a comment letter with the U.S. Department of Labor on the so-called "Harris Trust regulations." NOLHGA's letter supplements a 65-page ACLI submission.
Harris Trust was a 1993 decision of the U.S. Supreme Court which held that life insurance company general accounts hold fiduciary assets of ERISA employee benefit plans which purchase certain kinds of contracts from the general account. Absent relief, stringent fiduciary rules would apply to the management of all of the general account's assets, including rules which would bar many traditional and nonabusive types of transactions with affiliates and others. Many commentators have viewed the decision as fundamentally incompatible with state insurance regulations. The Department of Labor's proposal was intended to address some of the industry's concerns by better defining the contractual terms necessary to avoid having assets in the general account be considered assets of the plan which holds the underlying contract.
NOLHGA's letter emphasizes two points. First, assuming a life insurance company were to follow the proposed regulations and then become impaired or insolvent, the proposal's liberal withdrawal requirements would clash with traditional rules and concepts applied in delinquency proceedings and establish a "superpriority" class of policies in contravention with state law and the U.S. Supreme Court's decision in the Fabe case. NOLHGA recommends a complete exemption from the definition of "plan assets" for assets held in or transferred from insurance company estates in delinquency proceedings. Second, the same liberal withdrawal requirements ignore the possible encouragement of a "run on the bank" scenario and the increased likelihood that an insurance company insolvency would occur that might not otherwise have occurred. NOLHGA recommends that solvent companies be permitted to defer withdrawal payments under defined extraordinary conditions suggested by the ACLI. NOLHGA also has offered to meet with Department of Labor representatives to increase their knowledge and awareness of life company delinquency proceedings.
NOLHGA's letter represents the first time the organization has commented on proposed rulemaking by a federal agency. To obtain copies of the ACLI and NOLHGA letters, please call Tony Buonaguro at 703/787-4102.
Staff Contact - Sean McKennaETC.
Welcome Jack King!
Jack A. King became executive director of the Arizona Life and Disability Insurance Guaranty Fund effective March 16. He succeeds Jack Trimble, who served as the managing secretary of the association since its inception. Until about April 20, Mr. King and his staff will occupy temporary offices at 2910 North 44th Street, Suite 210, Phoenix, AZ 85018-7256. PHONE: 602/912-8465; FAX: 602/912-8459. NOLHGA will publish the permanent address and phone/fax information just prior to the move.
Maine Superintendent To Speak At MPC Meeting
Alessandro Iuppa, Maine Superintendent of Insurance, will be the keynote speaker at a noon Members' Participation Council luncheon June 2 in Portland, Maine. Thanks to Jean Hasch, administrator of the Maine guaranty association, for assisting with the speaker arrangements and for graciously offering to co-host the June 2 lobster bake reception.
For reservations, call the Sheraton Tara Hotel in South Portland, just a few minutes from the airport, at 207/775-6161. Please mention NOLHGA to assure the special rate of $94 per night. May 10 is the deadline for reservations. Dress for the June 1-3 MPC meeting is business casual. For more information, please call Krista Plumhoff at 703/787-4120.
Hon. Kenneth A. Rohrs To Speak At Legal Seminar
The Hon. Kenneth A. Rohrs, dean of the National Judicial College in Reno, Nev., has agreed to present the ethics portion of NOLHGA's Seventh Annual Legal Seminar, scheduled for July 23-24 in Reno. Dean Rohrs is a former judge of the Court of Common Pleas in Ohio. The National Judicial College is the national training and education center for trial judges, offering advanced degrees in judicial studies. The dean is uniquely qualified to instruct on the subject of legal ethics. Special thanks to Ben Dasher of the Nevada guaranty association for his assistance in coordinating this year's event speakers.
Staff Contact -- Joni Forsythe 703/787-4103
Institutional Memory
NOLHGA is in the process of instituting a corporate institutional memory and document retention program, which would include preserving archival material, planning for disaster recovery, complying with so-called "Year 2000" intricacies, storing documents, and compiling retention and destruction guidelines. Dick Klipstein is overseeing this project.
Staff would appreciate hearing from those who have instituted similar programs which in particular have included the management of both electronic and hard copy documents. Please contact Angela Franklin at 703/787-4105.
Welcome Robert Parker Wood!
Laura Wood, NOLHGA's administrative assistant to Dick Klipstein, Holly Wilding and Lisa Meyer, gave birth March 30 to Robert Parker Wood, who weighed in at eight pounds and eight ounces. Little "Parker" measured 20.5 inches. Mom, dad (Robert) and baby are well!
Welcome Chrissy Haley!
NOLHGA welcomes Chrissy Haley, who joined the staff March 30. Ms. Haley is the new Law Department secretarial assistant and will be working with Tony Buonaguro, Bill O'Sullivan, Joni Forsythe and Angela Franklin. She will have primary responsibility for Legal Seminar logistics. Please direct all calls concerning the upcoming seminr to Ms. Haley at 703/787-4101.
CALENDAR
April 22 Kentucky Central Asset Management Committee, Lexington, Ky. April 22 NOLHGA Compensation Committee, Milwaukee, 5 pm CDT April 23 NOLHGA Board of Directors, 8 am CDT, Milwaukee April 23-24 NCIGF Annual Meeting, Washington, D.C. April 30 Seventh ELIC installment payment due to Aurora May 10 Deadline for June MPC hotel reservations
Staff Contact - Sean McKennaCONFERENCE CALLS
April 21 Legal Seminar Planning Committee, 2 pm EDT