National Affiliated Investors (LA)
Assuming Carrier Selected
Citizens Security Life Insurance Company ("Citizens Security") and its wholly-owned subsidiary, United Liberty Life Insurance Company ("United Liberty"), have been selected by the task force and the Louisiana Department of Insurance to assume the in-force business of National Affiliated Investors. The assumption reinsurance agreement has been negotiated and finalized for execution.
On April 11, the Louisiana Insurance Commissioner filed a Petition for Liquidation of National Affiliated Investors, as well as a Petition for Approval of Contracts, including the proposed assumption reinsurance agreement and an early access agreement. Upon filing of the petitions, the Judge entered an order scheduling a hearing on the petitions for April 26. On April 12, the Judge held a preliminary teleconference with interested parties including representatives of the task force.
The assumption and early access agreements are expected to be signed by April 26. Closing is projected to occur in early July assuming the petitions are granted. The affected guaranty associations are expected to fund approximately $2.3 million at closing. Opt out packages for both the assumption and early access agreements will be sent to all affected guaranty associations by May 2.
Task Force Chair - Chuck Gullickson; Staff Contact - Paul Peterson Unison International Life (OK)Claims Agreement Signed
The Stipulation and Settlement Agreement on Class 2 and Class 3 Claims was signed this week. The agreement provides a mechanism by which the guaranty associations and the Receiver negotiated and agreed upon the guaranty associations' claim amounts. The terms of the agreement confirm the Class 2 claim amounts for administrative expenses and the Class 3 claim amounts for policyholder level claims. In addition, the agreement reallocates the two prior early access distributions and establishes a pro rata allocation for future distributions.
The agreement along with a memorandum outlining the provisions of the agreement were mailed to the affected guaranty associations on April 13. The deadline to opt-out of the agreement is May 15.
Task Force Chair - Bart Boles; Staff Contact - Bill O'Sullivan Executive Life (CA)Aurora Ninth Installment Billing
The Executive Life Task Force is now reviewing Arthur Andersen's report on the Ninth Installment Billing (as revised), which calls for participating guaranty associations to pay Aurora approximately $60.5 million on or before April 30, 2000. It is anticipated that the report will be sent to administrators of participating guaranty associations on April 17.
Arthur Andersen found several minor errors that Aurora will correct in next year's billing, and believes that the amounts due from each Participating Guaranty Association, based on Aurora's revised billing, are appropriate for payment. The Arthur Andersen report includes instructions for payment of the bill.
In other ELIC news, U.S. District Judge Matz announced on April 12 that he will shortly issue a new order dismissing the policyholder class action suit pending in the U.S. District Court in Los Angeles against Altus Finance S.A. and other defendants relating to the ELIC rehabilitation plan. Judge Matz stated that he will dismiss the action on the ground that the plaintiff policyholder's claim could only be brought by the California Commissioner, and therefore the plaintiff lacks standing. The ground for dismissal does not appear to permit the plaintiff to refile his claim in Judge Lewin's Conservation Court.
Task Force Chair - Art Dummer; Staff Contact - Mutual Benefit Life (NJ)On behalf of guaranty associations, NOLHGA has filed an omnibus proof of claim for guaranty association assessments with the MBLLAC liquidator. The liquidator is currently reviewing the information submitted. NOLHGA anticipates that distributions to guaranty associations submitting claims will occur before the end of third quarter 2000.
Task Force Chair - Art Dummer; Staff Contact -ETC.
NOLHGA Welcomes Mary Ellen Cappetta and Suchada Page
Mary Ellen Cappetta joined the NOLHGA team this week, replacing Kristen Howell who left in mid-March to pursue a career in MIS. Mary Ellen's principal assignments include supporting Peter Gallanis, Bill Howard and Dana Woodward. You can look forward to meeting Mary Ellen next month in Minneapolis.
Su Page also joined NOLHGA in late February as Accounting Assistant, replacing Maria Triana who left to pursue a full-time accounting position. Next time you're at NOLHGA, please stop by to say hello.
CALENDAR/CONFERENCE CALLS
April 20 Centennial/New Era Assumption Reinsurance Closing
April 27 Legal Committee Federal Issues Subgroup, Herndon, VA
May 2 Compensation Committee Meeting, Tysons Corner, VA
May 2 Audit Committee Meeting, Tysons Corner, VA
May 3 Board of Directors' Meeting, Tysons Corner, VA
May 9 Legal Committee Meeting, Orlando, FL
May 17-19 Members' Participation Council Meeting, Minneapolis, MN
July 20-21 NOLHGA Legal Seminar, Boston, MA