American Standard Life (OK)
Liquidation Proceedings Stayed
On April 16, 1999, David Nicholas, the former owner of American Standard Life, filed a petition with the Oklahoma District Court seeking to vacate ASL's liquidation order. Among other matters, the petition alleged that ASL is not insolvent and that the value of ASL's principal remaining asset - ranch property located in Park County, Colorado - is significantly understated on ASL's balance sheet. The petition also requested an emergency stay of the liquidation proceedings, including the sale of the Colorado property, until a full hearing on the petition to vacate could be held.
An emergency hearing on the stay request was held at 3 p.m. (CDT) on the day (April 16) Nicholas filed his petition. Following argument, the court agreed to stay the liquidation proceedings but ordered Mr. Nicholas to post $500,000 in cash by April 30. Objections to Nicholas' Petition to Vacate must be filed by May 6. A hearing date on the petition has not yet been scheduled by the court.
Task Force Chair - Andrea Bowers; Staff Contact - Bill O'Sullivan George Washington Life (WV)Amended Notices of Determination
Over the past two weeks, the George Washington Life Receiver mailed to certain participating guaranty associations notices of claim determinations and amended claim determinations. Affected are the Georgia, Kentucky, Missouri, Oklahoma, Puerto Rico, South Carolina, Texas and West Virginia associations. Other participating guaranty associations affected by George Washington Life received their claim determinations in October, 1998, and those determinations remain unchanged.
The Receiver is finalizing his petition seeking approval of a fourth early access distribution to guaranty associations. This distribution, combined with three prior distributions, represents 70% of guaranty associations' approved policyholder level claims. The distribution is expected to exceed $5 million.
Affected associations that plan to object to the Receiver's claim determination are urged to contact Angela Franklin as soon as possible, so that the Receiver may make appropriate adjustments to his petition.
Task Force Chair - Bart Boles; Staff Contact - Bill O'Sullivan Executive Life (CA)Reargument Sought in Gersenson
The Pennsylvania association has petitioned the Superior Court of Pennsylvania for reargument following that court's April 8 decision in Gersenson v. Pennsylvania Life and Health Insurance Guaranty Association. As reported in the April 16 Weekly Wire, the Superior Court affirmed a June 12, 1998 lower court ruling awarding $16.6 million to plaintiffs. In reaching its decision, the Superior Court found that the Conservation Court's order was not entitled to full faith and credit because Pennsylvania policyholders were denied due process on account of the inadequacy of the Executive Life Plan Election notice. This issue of the adequacy of the notice was raised in the case for the first time in the Superior Court's opinion.
In its petition, the association asserts that the decision merits reargument due to its wide-reaching implications and because certain points of law and facts of record were overlooked and misunderstood by the court. The petition specifically asserts that the court erroneously concluded that the election notice provided "materially false information." The petition notes that the notice clearly explained to policyholders the benefits they would receive upon opting-in to the plan and accurately described the policyholders' rights and risks as they were known at the time the notice was approved by the conservation court.
Staff Contact - Executive Life (CA)Installment Payment Due
In other ELIC news, Executive Life participating guaranty associations are reminded that the eighth Executive Life installment payment is due by Friday, April 30. If they have not already done so, PGAs are urged to forward written confirmation of their payment to Angela Franklin.
Task Force Chair - Art Dummer; Staff Contact -Midwest Region Guaranty Association Meeting
Guaranty association representatives from the midwest met in St. Louis, Missouri, April 12-13. Among the topics discussed were: websites for individual guaranty associations; assessment data resurvey results; status of state adoption of new model act provisions; Year 2000 issues; future organizational structure and joint ventures with other "safety net organizations;" and NOLHGA operations and projects such as NOLHGANet. Representatives from Illinois, Kansas, Missouri, Nebraska, North Dakota, Ohio, South Dakota and Wisconsin attended the meeting.
Staff Contact - Paul PetersonSoutheast Region Guaranty Association Meeting
Guaranty association representatives from the southeast met in Savannah, Georgia, April 15-16. Among the topics discussed were: guaranty association participation in NOLHGA task forces and committees; NOLHGANet; NOLHGA's Institutional Memory project; NOLHGA's use of consultants; MPC meeting format; relationships with insurance departments; guaranty association administrative tasks such as annual meetings and proxies, the escheat process, use and maintenance of lines of credit and liability insurance; use of the internet; assessment issues; and Year 2000 issues. Representatives from Alabama, Arkansas, Connecticut, Florida, Georgia, Kentucky, North Carolina, South Carolina and Virginia attended the meeting.
Staff Contact - Paul PetersonETC.
August MPC Meeting
There has been some confusion over the dates for the August MPC meeting. The correct dates are August 25-27.
Arthur Andersen Contacts
The phone numbers of Arthur Andersen's Washington, DC-based NOLHGA/Guaranty System client service team members are changing effective April 26, 1999. The new direct dial phone numbers are as follows: Tim Hart, Partner, 202.481.8440; Peter King, Partner, 202.481.8410; Marc Siegel, Manager, 202.481.8475; Kevin Stephens, Manager, 202.481.8485; Susan Deutsch, Sr. Consultant, 202.481.8409.
The general number for the team will be 202.481.8480 and the fax will be 202.481.7000. The street address remains 1666 K St., NW, Washington, DC 20006.
Don Kinney Contact Information
ELIC Project manager Don Kinney's address and phone number has been changed. U.S. mail should be sent to PO Box 3766, Carefree, AZ 85377; all other deliveries should be sent to Carefree Office Center, 7518 Elbow Bend Rd., Carefree, AZ 85377. Don's phone number is 480.575.0664; fax number is 480.575.0665.
Position Available
The Office of the Ohio Insurance Liquidator is seeking a new Chief Deputy Liquidator. The person selected will manage all Ohio liquidations. The position reports to the Liquidator (Ohio Insurance Commissioner) and is responsible for the day-to-day operations of the office, directs a staff of 30, and will work closely with legal counsel and other professionals in the liquidation process. The preferred candidate will be an attorney with broad background in legal and business management, preferably in insurance, or direct experience in the management of insurance liquidations. Send resume and salary requirements to: Lynn Hengle, The Office of the Ohio Insurance Liquidator, 1366 Dublin Road, Columbus, OH 43215.
CALENDAR/CONFERENCE CALLS
April 27 ELIC Task Force Meeting, Philadelphia, PA, 10 am
April 27 NOLHGA Audit Committee Meeting, Tysons Corner, VA, 1 pm
April 27 NOLHGA Executive Committee Meeting, Tysons Corner, VA, 2 pm
April 28 NOLHGA Board of Directors' Meeting, Tysons Corner, VA 3:30 pm
April 30 Legal Committee Claims Valuation Subgroup, Hilton O'Hare, Chicago, IL, 10 am
May 11 Legal Committee, Wyndham Garden Hotel (O'Hare Airport), Chicago, IL, 10am