Bankers Commercial Life Insurance Company (Tex.)
First Philadelphia American True-up Closes
The first true-up on the assumption reinsurance agreement with Philadelphia American Life Insurance Company closed on April 4. This true-up adjusted reserves on assumed policies (effective as of September 1, 2002) and also included settlement of all post-effective date premiums collected and claims paid by the guaranty associations and Philadelphia American. Guaranty associations funded approximately $301,000, bringing total funding for the assumption transaction to approximately $3.8 million.
The final accounting for the agreement is scheduled to occur in November/December 2003. Adjustments to the remaining claim reserves will be the only, and final, item addressed. In addition, it is anticipated that the estate will close and make final distributions by June 2003.
Task Force Chair - William Falck; Staff Contact - Paul Peterson Executive Life Insurance Company (Calif.)Court of Appeals Rules on Sierra Lawsuit
Upon appeal by Aurora of the district court's denial of its motion to dismiss the Sierra lawsuit, the Ninth Circuit Court of Appeals decided against Aurora's claim that the Sierra lawsuit was barred by a California litigation privilege. The court further determined that other issues, including an argument as to Sierra's standing to bring its lawsuit made by NOLHGA in an amicus brief, were premature at this time. As a result, the Sierra case will proceed in the district court.
In other news, during the week of March 30, the ELIC Task Force approved the Navigant Consulting report regarding Aurora's Twelfth Installment Billing and instructed Navigant to distribute the report to the ELIC participating guaranty associations. An aggregate total of $64.6 million is due to Aurora on or before April 30, 2003. Navigant's report includes a calculation for allocation among assessment sub-accounts and outlines the key components of the billing. Payment instructions are also included in the package.
Task Force Chair - Art Dummer; Staff Contact -NOLHGA's Twelfth Legal Seminar Slated for The Palace in San Francisco
The Twelfth Annual NOLHGA Legal Seminar is scheduled to take place on August 21-22, 2003, at The Palace Hotel in San Francisco. The Legal Seminar Planning Committee has scheduled a number of panels on topics important to the guaranty system, including various ways in which the federal insurance regulatory role has grown, class action litigation, health insurance issues, and tax laws. Brochures for the meeting will be distributed in early June. Please contact Aimee Frye (703.787.4115; [email protected]) or Meg Melusen (703.787.4130; [email protected]) for further information.
Staff Contact -Montana and South Dakota Update Guaranty Association Acts
The Montana and South Dakota legislatures recently approved bills updating their state's guaranty association act to be more consistent with the current NAIC Life and Health Insurance Guaranty Association Model Act. In South Dakota, the governor signed the legislation on March 24; it will become effective on July 1, 2003. In Montana, the governor signed the legislation on April 1, and it also will become effective on July 1, 2003. In each state, the state insurance department provided valuable support in getting the guaranty association legislation passed. With the passage of this legislation, Montana and South Dakota join a growing number of states that have recently updated their guaranty association acts: Alaska, Arkansas, Colorado, Connecticut, Delaware, Iowa, Kentucky, Minnesota, Mississippi, Nebraska, Nevada, North Dakota, Utah, and Washington.
Staff Contact - Bill O'Sullivan