Andrew Jackson Life Insurance Company (Miss.)
Mississippi Supreme Court Affirms: No Extra-contractual Liability for Assuming Carrier
The Mississippi Supreme Court has upheld a trial court ruling on the exclusion of extra-contractual liability under an assumption reinsurance agreement. The original litigation at issue arose in connection with policies issued by the Andrew Jackson Life Insurance Company and assumed by Central Security Life Insurance Company pursuant to a 1993 assumption reinsurance agreement approved by the receivership court after Andrew Jackson was placed into liquidation. The case was filed in Mississippi against Central Security and a former agent of Andrew Jackson, alleging liability for fraud, misrepresentation, and the use of false and misleading marketing materials and vanishing premium illustrations to induce the plaintiffs to purchase certain life insurance policies from Andrew Jackson. In June 2005 the trial court granted judgment in favor of Central Security, finding that the assuming carrier is not responsible for any acts or omissions of the now-insolvent Andrew Jackson Life or its agents. Following denial of their motion for reconsideration, the plaintiffs took the matter up on appeal to the Mississippi Supreme Court.
NOLHGA and the Mississippi guaranty association joined in filing an amicus brief in this case, urging the court to uphold and enforce the express statutory limitations on guaranty association coverage obligations and the corresponding assumption contract provisions excluding from the assumption transfer any liability for extra-contractual obligations. In a lengthy opinion issued on April 5, 2007, the Mississippi Supreme Court affirmed the trial court judgment upholding the express exclusion of extra-contractual liability under the assumption reinsurance agreement. An electronic copy of the court's April 5 opinion is available via e-mail upon request. Please contact Aimee Hoffman at [email protected] or 703.787.4115 if you would like a copy of the opinion.
Task Force Chair - Dan Elrod; Staff Contact - Joni Forsythe Executive Life Insurance Company (Calif.)Aurora Sixteenth Installment Billing Approved
Recently, the Executive Life Task Force accepted Navigant's report on the Sixteenth Installment Billing and authorized its transmission to the participating guaranty associations (PGAs). The bill calls for PGAs to pay Aurora approximately $56.3 million on or before April 30, 2007. Navigant's report was sent to administrators of the PGAs on March 30, and it includes a copy of Aurora's bill with instructions for payment.
Task Force Chair - Art Dummer; Staff Contact -Rooms Still Available for San Francisco Legal Seminar & MPC Meeting
Due to a computer error, the Stanford Court Hotel in San Francisco has been incorrectly advising NOLHGA hotel guests that the NOLHGA room block was sold out for the July MPC meeting and 15th Annual Legal Seminar, which are being held at the hotel. We understand that the error has been corrected, and no further problems are anticipated.
The Legal Seminar is scheduled for July 12-13, 2007, with the MPC meeting scheduled for July 11. Reservations for both meetings can be made by calling 415.989.3500 or by booking online. NOLHGA has reserved a room block only for the nights of the meetings, but the special rate of $199/night is available for the entire week and weekend if rooms area available. The hotel anticipates filling up quickly due to Major League Baseball's All-Star Game, which will be held early in the week, so we encourage attendees to make their reservations as soon as possible.
Staff Contact -Global Warming and the Insurance Sector at the Legal Seminar
Mark Brownstein, from the New York office of Environmental Defense, has agreed to speak at NOLHGA's 15th Annual Legal Seminar in July. Brownstein, who specializes in global warming issues, is the managing director of business partnerships in the organization's Climate and Air Program, and in that capacity he works with corporations and investors to develop business strategies and public policies for capping and reducing greenhouse gas emissions. Brownstein received his degree from the University of Michigan Law School and has an extensive background in efforts to develop federal regulatory and legislative controls of power plant emissions. At the seminar, he will discuss climate change and its potential effects on the insurance industry.
NOLHGA's 15th Annual Legal Seminar is scheduled for July 12-13, 2007, in San Francisco, with an MPC meeting scheduled for July 11. Both meetings will take place at San Francisco's Stanford Court Hotel, and reservations can be made by calling 415.989.3500 or by booking online.
Staff Contact -NAIC Invites Public Comment on New Receivership Law Requirements for State Accreditation Standards
In March 2007, the NAIC's Financial Regulation Standards and Accreditation Committee (FRSAC) began discussion of a pending initiative to incorporate into state accreditation standards the NAIC's Insurer Receivership Model Act (IRMA), which was adopted by the NAIC in December 2005. The current accreditation standard relating to receivership contains a reference to the NAIC's prior receivership model and requires simply that states have laws setting forth a "receivership scheme" for the administration of insolvent insurance companies similar to that set forth in the prior model.
FRSAC is now considering whether to incorporate the new receivership model into the standard and whether to retain the existing threshold standard of requiring a receivership scheme or expand the standard to a much more stringent requirement that states adopt receivership laws that are substantially similar to the provisions of IRMA. At the March NAIC meeting, FRSAC voted to expose the new model for public comment on these issues and to hold a public hearing on the matter in conjunction with the June NAIC meeting. The 30-day comment period commenced on April 9, and comments are due by May 7. Comments should be sent to the attention of Julie Glaszczak, senior accreditation manager, at [email protected]. The receivership model is posted in a public section of the NAIC Web site under F Committee exposure documents.
Staff Contact - Joni Forsythe