AMS Life Insurance Company (Ariz.)

Receiver Files Petition for Review with Arizona Supreme Court

On February 15, 2005, the Arizona Court of Appeals entered an order reversing a trial court judgment pursuant to which the receiver had been awarded more than $19 million against former AMS actuaries. The receiver has filed a Petition for Review with the Arizona Supreme Court challenging the Court of Appeals's reversal of judgment. A copy of the receiver's Petition for Review is available to member associations on NOLHGA's Information Resource Center (IRC) database.

This litigation was filed by the receiver in 1997 alleging multiple counts of fraud and professional negligence arising in connection with the accounting and actuarial services provided to AMS Life during a period spanning from 1983 to 1991. A judgment for the receiver was entered in September 2001, followed by a subsequent award of interest, costs, and sanctions. As set forth in the trial court's findings, the defendants provided virtually all of the actuarial services for AMS Life during the period at issue, including quarterly reserve calculations and year-end certification of reserves, and further provided information for annual statements. The trial court went on to conclude that the defendants knew or should have known that AMS Life was totally dependent upon the defendants to provide timely and accurate actuarial services and that their repeated failure to do so was a violation of professional obligations to AMS Life, the state regulators, and policyholders. The subsequent reversal by the Court of Appeals was based on that court's finding of insufficient evidence of actual reliance on false and misleading actuarial opinions issued by the defendants.

The receiver's Petition for Review was filed on March 17, 2005, and the defendants' response is expected shortly. However, it may be several months before the Arizona Supreme Court rules on the petition.

Task Force Chair - Luther Hill;   Staff Contact - Joni Forsythe

Last Day for Guaranteed MPC Meeting Hotel Reservations

The deadline for hotel reservations for the next MPC meeting, which will be held May 16-18, 2005, at the Four Seasons Hotel Austin in Austin, Tex., is today, April 22. Attendees will still be able to make reservations after the deadline passes (space permitting), but they will not be guaranteed the NOLHGA room rate of $185 a night. We urge you to make your reservations and register for the meeting today if you have not already done so.

Contact information for the Four Seasons can be found at the meeting Web page. The meeting page also offers online registration, a preliminary meeting schedule, and other meeting details.

If you have any trouble accessing the meeting Web page, please contact Dan Hicks at [email protected] or 703.787.4112. Questions concerning the MPC meeting should be directed to Sean McKenna at [email protected] or 703.787.4106.

  Staff Contact - Sean McKenna

Legal Seminar to Feature Panel on Spitzer Impact

NOLHGA's 13th Annual Legal Seminar, which will be held in Park City, Utah, this summer, will feature a panel looking into the impact of the insurance practices investigations first launched in October 2004 by New York Attorney General Eliot Spitzer. The panel will include John Washburn, a senior vice president of Aon Corporation, and Deputy Commissioner Erin Toll of the Colorado Insurance Department.

As an executive at one of the major brokerage firms, Washburn will discuss the brokerage perspective on the contingent commission investigations and their impact on the market and evolving best practices. Deputy Commissioner Toll will provide the regulatory perspective on contingent commissions and consumer protection.

NOLHGA's 13th Annual Legal Seminar will be held August 18-19, 2005, at the Stein Eriksen Lodge in Park City, Utah. Please call Aimee Frye at 703.787.4115 or e-mail Meg Melusen at [email protected] for additional information about the seminar.

  Staff Contact -