Executive Life Insurance Company (Calif.)
Request for Defeasance Computation
As in prior years, any participating guaranty association (PGA) contemplating the possibility of defeasance in 2005 must make a request for a defeasance computation in writing to Aurora before year-end 2004. According to the Enhancement Agreement, Aurora then has 60 days after year-end to calculate the PGA's defeasance amount, and each PGA has until the 150th day after the preceding December 31 (i.e., May 30, 2005) to decide whether or not to defease. NOLHGA will distribute a notice with additional information on this subject to the PGAs this week.
Task Force Chair - Art Dummer; Staff Contact - London Pacific Life & Annuity Company (N.C.)Claims Funding Due December 12
As a reminder, Philadelphia American Life Insurance Company e-mailed claims funding requests to guaranty associations the week of November 28, 2004. However, the company experienced problems with the e-mail addresses of certain associations using AOL, probably due to AOL marking Philadelphia American's email as "spam." Guaranty associations (particularly those using AOL) are requested to adjust their e-mail systems to allow receipt of e-mail from the company.
The funding requests were sent to the following associations: California, Florida, Georgia, Iowa, Illinois, Minnesota, North Carolina, Nebraska, Nevada, Ohio, Pennsylvania, Texas, Washington, and Wisconsin. Each association should have received two e-mails: a detail report on a policy-level basis and a summary report listing total funding due by state. Please contact Philadelphia American or Paul Peterson ([email protected] or 703.787.4119) immediately if you did not receive these reports, since funding is due no later than December 12.
The first true-up with Hartford Life is expected to occur on December 10. This true-up will account for all potential exchange policyholders who elected to exercise the "free look" right to cancel their Hartford contracts received through November 30 (these will be set up as stayback contracts by the guaranty associations, if covered), corrections due to miscoding of elections, return of funds to the estate due to death claims, etc. Guaranty associations will receive approximately $15 million; $1.2 million will be sent to London Pacific for deposit to the guaranty association escrow account (funds related to the estate assets for the covered portion of contracts of policyholders who have elected to surrender their entire contracts), while $13.8 million will be sent to NOLHGA. NOLHGA expects to distribute these funds to the guaranty associations during the week of December 12.
NOLHGA also expects to send to the guaranty associations on or about December 15 the funding and payment instructions dealing with payments to policyholders who elected to surrender their entire contracts. This funding represents the shortfall on covered cash surrender values plus interest to December 29. Funding will be due December 23. The current estimate of the amount due from the guaranty associations is approximately $54.5 million. All surrender checks are expected to be mailed by the end of December by the receiver. Associations should be sure that arrangements are in place to make the necessary payments, since this is the holiday season and many will be taking vacations.
Finally, a revised Exhibit D file that incorporates all the post-closing adjustments mentioned above will be sent to guaranty associations by mid-January. This file will be in a format similar to what has been sent in the past.
Task Force Chair - Frank Gartland; Staff Contact - Paul Peterson National American Life Insurance Co. of Pennsylvania (Pa.)Final Estate Distribution Expected
The final distribution from the estate is expected to be received by NOLHGA and Acacia National Life Insurance Company (the assuming company) during the week of December 5. With this distribution, guaranty associations will have recovered 100 percent of approved administrative expenses and 89.3 percent of policy-level claims. Guaranty associations will receive approximately $7.2 million, and Acacia National will receive $1.3 million (for uncovered policy claims).
Task Force Chair - Tad Rhodes; Staff Contact - Paul PetersonNAIC Solicits Comments on Rehabilitation and Liquidation Model Act
The NAIC's Model Act Revisions Working Group is nearing completion of its work on a much-revised draft of the NAIC Model Rehabilitation and Liquidation Act and is soliciting input and comments from interested parties.
This draft is the product of a multi-year effort to update and revise the receivership model. The efforts of the Working Group are expected to be completed by year-end, with the expectation that a final draft will be presented for approval to the NAIC's Receivership and Insolvency Task Force in January 2005 and queued up for final NAIC approval in March. Given the comprehensive nature of the changes made to this model and the fact that the NAIC has stated its intent to make adoption of the new receivership model an accreditation standard for the states, interested parties are urged to review the revised draft and provide any input or comments they may have.
A copy of the revised draft model is available on the NAIC Web site in the Receivership and Insolvency Task Force section; it includes instructions for submitting comments to the NAIC. You may also request a copy of the draft by contacting Aimee Frye at NOLHGA ([email protected] or 703.787.4115).
Staff Contact - Joni Forsythe