American Chambers Life (OH)
Arrangements Pending for Claims Administration
On March 31, task force representatives met by teleconference with the Receiver and representatives of Antares Management Solutions, a third party administrator, to discuss a draft service agreement under which Antares will process claims for the participating guaranty associations if American Chambers is liquidated.
The task force and the Receiver will also negotiate an early access agreement under which the Receiver could make distributions to the affected guaranty associations.
The guaranty associations need to have a claim processing mechanism in place since the Rehabilitator expects to seek a liquidation order soon. The task force plans to send both agreements to the MPC Executive Committee for approval the week of April 17 and will request a shortened opt-out period of 15 - 20 days to begin the week of April 24.
American Chambers continues to process claims; however, the Receiver has been withholding claim payments since March 9. The task force has asked that he consider paying policyholder claims up to guaranty association limits to the extent his cash position will permit. In addition, the Receiver plans to cancel American Chambers' health business not being assumed by Continental General. Information regarding the cancellation plans was faxed to the guaranty associations on March 31.
Task force representatives traveled to American Chambers' home office in Naperville, IL March 22-23 to begin due diligence on potential guaranty association obligations. The task force received a draft report of findings on April 3.
In addition, the Task Force met by teleconference on April 3 to discuss the Antares agreement, the status of the proposed reinsurance agreement with Continental General Life, and issues regarding claim audits and oversight of Antares.
Task Force Chair - Charles Gullickson; Staff Contact - Kentucky Central Life (KY)Approximately $1.1 million will be distributed to the guaranty associations later this month. The distribution completes the repayment of the participating guaranty association's $110 million closing funding. Last June, the participating guaranty associations received a distribution of approximately $41 million from the Kentucky Central estate as repayment of closing costs. At the time of that distribution, about $3 million was held back by Jefferson Pilot for allocation to the uncovered portions of covered policies. It has been determined that only $2.09 million is needed for the allocation. The balance, including interest, will be distributed to the guaranty associations. A notice will be sent to all affected guaranty associations this week setting forth the allocation figures, and requesting wire instructions for those receiving funds in excess of $20,000.
Forms for reporting expenses incurred in the first quarter 2000 were faxed to all affected guaranty associations this week. Completed forms should be returned by May 15 to NOLHGA, attention Karen Early, 13873 Park Center Road, Suite 329, Herndon, VA 20171. Forms may also be returned by fax to 703.481.5209.
For those states that have not yet submitted expense data for year-end 1999, please send that information in at this time so that it can be compiled and submitted to the Receiver's office.
Task Force Chair - John Colpean; Staff Contact - Joni Forsythe Mutual Benefit Life (NJ)NOLHGA has compiled the guaranty associations' proofs of claim, and will file a summary POC and supporting documentation with the MBLLAC Liquidator at the Liquidator's request. The POCs represent outstanding, unbilled assessments for which MBLLAC is responsible. The filing deadline is April 11.
Task Force Chair - Art Dummer; Staff Contact -ETC.
Mark Your Calendars!
NOLHGA's Ninth Annual Legal Seminar will take place in Boston at the Fairmont Copley Plaza July 20 - 21. Join your colleagues in historic Boston as the seminar examines the latest on legal issues affecting the guaranty association system. The preliminary agenda includes lessons learned from multiple company insolvencies; implications of the Gramm-Leach-Bliley Act for the guaranty association system; and how e-commerce is being used by the industry. Questions regarding the seminar can be directed to Meg Melusen at 703.787.4130 and Karen Early 703. 787.4101.
New E-mail address for the Kansas Guaranty Association
Effective April 10, the new e-mail address for the Kansas Life & Health Insurance Guaranty Association is [email protected].
CALENDAR/CONFERENCE CALLS
April 10 American Chambers Life Task Force Teleconference, 2:30 pm, EDT
April 27 Legal Committee Federal Issues Subgroup, Herndon, VA
May 2 Compensation Committee Meeting, Tysons Corner, VA
May 2 Audit Committee Meeting, Tysons Corner, VA
May 2 NHL Trustees Meeting, Orlando, FL
May 3 Board of Directors' Meeting, Tysons Corner, VA
May 9 Legal Committee Meeting, Orlando, FL
May 17-19 Members' Participation Council Meeting, Minneapolis, MN
July 20-21 NOLHGA Legal Seminar, Boston, MA