Legion Insurance Companies Placed into Rehabilitation
On March 28, the Commonwealth Court of Pennsylvania placed two of the Legion Insurance Group's companies into rehabilitation in response to petitions presented to the court by Pennsylvania Insurance Commissioner M. Diane Koken. Both companies are domiciled in Pennsylvania.
Legion Insurance Company (NAIC: 24422) and Villanova Insurance Company (NAIC: 19577) are property and casualty companies that wrote various forms of accident and health insurance, ranging from short-term disability to first dollar medical. In 2001, it appears they wrote business in all but five states. Together the two companies wrote nearly $120 million in premiums, of which approximately $70 million was for stop-loss policies.
Additionally, The Legion Indemnity Company (NAIC: 29912), the third of the Legion Insurance Group companies, was placed into conservation on April 3 by the Circuit Court of Cook County, Illinois. Legion Indemnity is domiciled in Illinois, and our information indicates that it was licensed in Illinois and possibly other states as a surplus lines writer.
MPC Chair William Falck and NOLHGA President Peter Gallanis are reviewing information concerning the companies and are in the process of assembling a task force and appointing consultants. When the task force is formed, the staff contacts will be Paul Peterson (703.787.4119) and Larry Henry (703.787.4120).
Staff Contact - AMS Life Insurance Company (Ariz.)Arizona Receiver Awarded Additional $1.5 Million
Last fall, the Arizona receiver for AMS Life was awarded a judgment of $17.5 million in connection with its claims against various defendants that provided accounting and actuarial services to AMS Life prior to the initiation of the receivership proceedings in 1992.
This litigation included multiple counts of professional negligence in connection with the accounting and actuarial services provided to AMS Life during a period that spanned from 1983 to 1991. Before reaching trial in June 2001, the receiver had obtained settlement agreements from several of the defendants resulting in recoveries of approximately $8.255 million for the estate. The case then proceeded to trial against the remaining defendants, resulting in judgment for the receiver in the amount of $17.5 million. That award and the court's findings were reported in the September 21, 2001, issue of the Wire.
Thereafter, the parties continued briefing and argument with respect to the defendants' post-trial objections, as well as the receiver's petitions for interest, costs, and sanctions. By order dated February 6, 2002, the court awarded the receiver interest, costs, and sanctions in excess of $1.5 million, thereby increasing the judgment amount to more than $19 million.
The defendants have filed a notice of appeal, and proceedings before the Court of Appeals could take a year or more to complete. In the meantime, interest on the judgment continues to accrue at a rate of $4,795.00 per day.
Task Force Chair - Luther Hill; Staff Contact - Joni Forsythe National Heritage Life Insurance Company (Del.)Administrative Expenses Requested
On April 8, NOLHGA distributed worksheets to affected guaranty associations to gather information for the reimbursement of administrative expenses for National Heritage Life incurred during the period April 1, 1999, through March 31, 2002. The worksheets should be returned by May 15. Questions should be directed to Meg Melusen at 703.787.4130 or [email protected].
Task Force Chair - Dan Orth; Staff Contact -Conflicts Questionnaires and Antitrust Certifications Due April 15
NOLHGA's Conflicts Policy and Questionnaire were mailed March 6 to all NOLHGA personnel and representatives, including NOLHGA Board members, committee and task force members, and consultants. At the same time, NOLHGA's Antitrust Policy and Certification Form were sent to all the persons mentioned above, as well as all NOLHGA members.
The conflicts questionnaire and antitrust certification are required to be completed on an annual basis and are due no later than April 15. If you have not yet completed and returned these items, we ask that you please do so immediately.
These forms only take a few minutes to complete, and your timely response is very important. The forms may be submitted by fax (703.481.5209) or by mail and should be directed to the attention of Aimee Frye. Please feel free to call Aimee at 703.787.4115 if you have any questions or would like to request additional forms. Your assistance in this matter is greatly appreciated.
Staff Contact -