London Pacific Life & Annuity Company (N.C.)

GA Funding Due December 23

Guaranty association funding schedules for the policyholders who elected to surrender their entire London Pacific contracts were e-mailed to all guaranty associations on December 14, 2004. All guaranty associations will need to provide funding, and the e-mail message contained payment instructions. The deadline for payment is December 23.

The first true-up for corrections and other adjustments between the London Pacific estate and guaranty associations has also been completed. Schedules and payment instructions were e-mailed to all guaranty associations on December 15. The following states will need to provide funding: Arizona, Arkansas, Indiana, Kansas, Kentucky, Virginia, and Wyoming (we respectfully request that associations do not combine this payment with the surrender funding). The payment deadline is December 23.

In addition to this funding, NOLHGA will be receiving approximately $861,000 from the guaranty association escrow account held at London Pacific. Once these funds are received (and combined with the remaining amount held in the NOLHGA escrow account), distributions will be made to the remaining guaranty associations, where applicable.

These two transactions should complete the funding associated with the exchange program for 2004. However, it is likely that a minor amount of future corrections and other adjustments will be made. These will be handled in the next true-up with Hartford Life and London Pacific (if it is determined that one is necessary) or at the final accounting scheduled for April 2005.

Batch 3 claims funding reports should be e-mailed from Philadelphia American on December 16 to all guaranty associations. If you do not receive the e-mail, please contact Carol Anders ([email protected]) or Mike Gallagher ([email protected]) at Philadelphia American or Aimee Frye ([email protected] or 703.787.4115) at NOLHGA.

Task Force Chair - Frank Gartland;   Staff Contact - Paul Peterson

Insolvency Cost Information Report Now Available on NOLHGA Web Site

NOLHGA has issued this year's Insolvency Cost Information Report, which assists member companies in establishing accruals for life, annuity, and health guaranty association assessments pursuant to Statement of Statutory Accounting Principle No. 35 - Accounting for Guaranty Fund and Other Assessments (finalized March 2000 by the NAIC) and SOP 97-3 - Accounting by Insurance and Other Enterprises for Guaranty Fund and Certain Other Insurance-Related Assessments (released December 1997 by the AICPA). The report contains information regarding the cost of insolvencies, assessable premium by state, and summaries of each state's general assessment and premium tax offset provisions.

The 2004 Insolvency Cost Information Report can be accessed here. Please note that the report will not be issued in hard-copy format. Instead, it is available for download from NOLHGA's Web site at the link above. It can also be accessed through the NOLHGA Web site home page by using the link in the "Insolvency Corner" section. Users do not have to log in to access the report.

The report contains the following data files:

Costs: An Excel workbook containing individual insolvency cost information along with various summary schedules and by-state assessable premium information.
Report: A PDF file that combines the above file with commentary on cases and with general state provisions regarding assessment and premium tax offsets.
Download: A WinZip file containing both files.

In addition, copies of SSAP No. 35 and SOP 97-3 are also available. If you have any questions about the report, please contact Paul Peterson at [email protected] or 703.787.4119.

  Staff Contact - Paul Peterson

Assessment and Capacity Reports Posted to Web Site

Each year, NOLHGA compiles information on assessment activity--whether assessed, called (billed), or refunded--from guaranty associations. This information is compiled in reports such as:

1. Annual amounts assessed and called (billed to member companies) as well as estimated capacity.
2. Annual amounts assessed and called as well as capacity sorted by state and year.
3. Summary amounts assessed and called by insolvent company.

These reports are now available on NOLHGA's Web site in the password-protected extranet. Users must log in to access the reports, which can be found in the "Special Reports" section. Please note that only guaranty association administrators, guaranty association staff, guaranty association board members, and insurance department personnel are allowed access to this information.

The reports cover the period from 1988 to 2003 and contain assessment information on approximately 200 insolvent companies. If any guaranty association personnel note an error in the data, please submit corrected information to Paul Peterson at [email protected].

  Staff Contact - Paul Peterson

NOLHGA Office Holiday Closings

The NOLHGA office will be closed on December 24 and 31, 2004, for the holidays. The NOLHGA staff wishes everyone a safe and happy holiday season.

  Staff Contact - Sean McKenna