MPC Meeting Summary

The following are summaries of task force reports given during the August 16-18 MPC Meeting in San Francisco, CA. The Executive Life and Fidelity Bankers Task Forces met in closed session.

American Chambers Life (OH)

Members of the claims working group brought attendees up to date on a variety of issues related to the processing of claims. Mark Femal reported that Antares, the TPA managing claims processing on behalf of guaranty associations, is still receiving in the neighborhood of 10-12,000 calls a week regarding claims status. Femal also reported that Antares anticipates that all inquiries faxed by guaranty associations to Antares regarding claims will be handled by next week.

Bob Tice reported that Antares has provided the task force with an Action Plan outlining steps Antares will take to improve claims processing efficiency. If the plan's assumptions regarding number of claims processors, processor efficiency, and claim receipts are accurate, Antares should be able to eliminate the claims backlog by the end of November. Tice and Femal also discussed EOBs prepared by Antares and pointed out that if GAs do not need copies of EOBs and are willing to pay claims off of Antares' claims list, they should complete a form provided to them for that purpose with Claims Batch #4 and fax that back to Antares.

The task force also reported that: (I) Antares will be sending out Claims Batch #5 shortly; (II) Antares has been able to keep ACLIC's drug discount network in place and GAs should pay those claims promptly; and (III) to the best knowledge of the task force, all PPO networks (with exception of one in Colorado) remain in place and GA's should also pay PPO network fees promptly to assure that those network benefits will still be available to GAs.

Finally, the task forced approved a resolution that would eliminate certain reviews for claims under $50 in order to improve claims processing efficiency.

Task Force Chair -Chuck Gullickson;   Staff Contact - American Standard Life (OK)

Task Force Chair Andrea Bowers brought attendees up to date on the status of negotiations between guaranty associations, LACOP/Pennsylvania Guaranty Association, and the receiver on resolving the claims of LACOP against the ASL estate. Bowers outlined an agreement whereby guaranty associations will enter an early access agreement with the receiver who would distribute $8.7 million to participating guaranty associations (PGAs). The PGAs will then pay LACOP/PA $4.1 million and LACOP/PA will drop its secured claim. PGAs will then share the remaining $4.6 million from the early access agreement. The MPC approved a resolution authorizing NOLHGA to execute an early access agreement with the ASL receiver and a settlement agreement with LACOP/PA, and to initiate a 20-day opt-out process for affected GAs with respect to the agreements.

Task Force Chair -Andrea Bowers;   Staff Contact - Bill O'Sullivan American Western Life (UT)

Task Force Chair Chuck Renn and Counsel John Finston reported on recent negotiations with the American Western receiver regarding early access distributions for guaranty association administrative level claims. Unlike other recent insolvencies, in which NOLHGA task forces negotiated early access agreements and have filed omnibus proofs of claims, the AWL receiver has required a separate early access agreement for each distribution, and a separate proof of claim for each affected GA. Following negotiations between counsel for both sides, agreement was reached on the form of early access agreements. Most affected GA's have executed the early access agreements, but some have objected to the amount of claims allowed by the receiver.

Task Force Chair -Chuck Renn;   Staff Contact - Bankers Commercial Life (TX)

Task Force Chairman William Falck and Project Manager Paul Peterson presented an overview of claims and bid activities with respect to Bankers Commercial. Peterson noted that GA's recently funded claims through June 30. United Teacher Associates (UTA) is working on mailing checks once funds are received.

In addition, UTA has presented a letter of intent to purchase all Bankers Commercial policies. Peterson presented an overview of the valuation work completed on the Bankers Commercial business along with a comparison of costs if an open bid process were to be undertaken. The MPC then approved a resolution authorizing the task force to negotiate an assumption reinsurance agreement with UTA.

Task Force Chair -William Falck;   Staff Contact - Paul Peterson Centennial Life (KS)

Bob Tice reported on recent negotiations with a proposed reinsurer regarding assumptions of the LTD block. The MPC adopted a resolution authorizing the task force to finalize the assumption agreement and submit it to affected GA's for funding, subject to the normal 30-day opt-out period. Tice also noted that the Receiver is in negotiations to commute the reinsurance on the LTD block, which is intended to occur prior to the assumption.

The task force also reported that settlement of the Receiver's litigation with Universe Life, in liquidation in Idaho, has been approved by the Idaho Liquidation Court, and has been submitted to the Kansas Liquidation Court for approval. No objections have been filed in the Kansas Liquidation Court, and approval is expected by August 31. As a result, $11.2 million in funds held by the Kansas Federal Court under an interpleader action filed by AXA re following its 1999 settlement, was released to Centennial. With the recovery of the $11.2 million, the receiver has sufficient cash to fund about 85 percent of the cost of the LTD assumption agreement. The receiver has also indicated his intention to make additional administrative and policyholder level distributions by year-end.

A financial questionnaire will be mailed to all affected guaranty associations in the next few days and will be utilized to support the Class I and Class III distributions.

Task Force Chair -Mark Femal;   Staff Contact - Mid-Continent Life (OK)

Task Force Chair Sonya Ekart told attendees that American Fidelity had submitted a bid that exceeded a previous bid by another company. A key component of the winning bid was a provision that would keep premiums level for 17 years. There will be a confirmation hearing on the bid on September 18.

Ekart also apprised attendees that they should ensure that MCL is paying its assessments.

Task Force Chair -Sonya Ekart;   Staff Contact - Bill O'Sullivan Statesman National Life (TX)

Task Force Chair Neil Rucksdashel brought attendees up to date on recent developments in the case. He noted that there will be a meeting with the Special Deputy Receiver on August 28.

Task Force Chair -Neil Rucksdashel;   Staff Contact - Thunor Trust Companies

Task Force Chair Chuck LaShelle brought attendees up to date on recent developments. On July 26, task force representatives met with Madison National Life and reviewed final accounting adjustments for Franklin Protective Life, Family Guaranty Life, International Financial Services Life and First National Life of America. A key focus of the task force in the future, according to LaShelle, will be on asset recovery efforts and ensuring that federal recoveries are directed to the receivers.

Task Force Chair -Chuck LaShelle;   Staff Contact -

NOLHGA Library Project

Holly Wilding provided a status report on the NOLHGA website and the NOLHGA library project. With respect to the website, new features to be unveiled in the future include online registration, active e-mail lists, and the integration of NOLHGA's membership database. With respect to the library, Wilding reported that primary and secondary documents for 38 insolvencies will be scanned, indexed and uploaded to the library. It is anticipated that an online demonstration of the system will be available at the NOLHGA Annual Meeting.

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