MPC Meets in Florida

The Members’ Participation Council met in Naples, Fla., on February 18, 2004. The following are summaries of task force insolvency reports presented during the meeting:

  Staff Contact - Sean McKenna American Standard Life & Accident Insurance Company (Okla.)

Task Force Chair Andrea Bowers (S.C.) reported that a $1.1 million distribution from the estate will be sent to affected guaranty associations in the next week or so. This will be the final distribution from the estate.

Task Force Chair — Andrea Bowers;   Staff Contact - Bill O'Sullivan George Washington Life Insurance Company (W.Va.)

Task Force Chair Bart Boles (Tex.) reported that the receiver has suggested transferring an uncollected judgment against a former managing general agent for the company to the guaranty associations as a way to expedite the closing of the estate. The task force's legal counsel will analyze the judgment and make a recommendation on the receiver's plan.

Task Force Chair — Bart Boles;   Staff Contact - Bill O'Sullivan Guarantee Security Life Insurance Company (Fla.)

Task Force Chair Frank Gartland (Ohio) briefed attendees on the status of this insolvency, reporting that the estate (which has approximately $16 million in remaining assets) is almost ready to close. A close-out plan is expected in the late spring or early summer of 2004.

Task Force Chair — Frank Gartland;   Staff Contact - Bill O'Sullivan Legion/Villanova Life Insurance Companies (Pa.)

Task Force Legal Counsel Frank O'Loughlin (Rothgerber, Johnson & Lyons) updated attendees on the latest developments in the receiver's challenge to a portion of the liquidation order granting select policyholders cut-through rights to reinsurance proceeds. The matter is now before two appellate courts. Project Manager Fred Buck (Buck & Associates) also updated attendees on guaranty association payments covering stop-loss insurance, which total approximately $2 million. The estate is continuing to pay accident and health claims, and nearly all the disability policies have been transferred.

Task Force Chair — Peter Leonard;   Staff Contact - Paul Peterson

Variable Products, GA System Modernization Highlight MPC Presentations

In other meeting news, Jim Mumford (NOLHGA Chair) provided a report on a joint NOLHGA/American Council of Life Insurers (ACLI) meeting to discuss separate account variable products and the implications for possible guaranty association coverage of these products. He also participated in the Administrators’ Education Steering Committee presentation "How NOLHGA Works," alongside Frank Gartland (Ohio), Peter Gallanis (NOLHGA President), and Bill O'Sullivan (NOLHGA Senior Vice President and General Counsel). The presentation traced the history of NOLHGA and explained how the various bodies within the organization--such as committees, task forces, and the NOLHGA Board--operate.

MPC Chair Jack Falkenbach (Del.) reported on the first meeting of the Guaranty System Modernization Task Force, which is charged with analyzing the life and health state-based guaranty system, identifying areas that might be modernized, and developing recommendations to that effect. The task force held its first meeting in January 2004 and will hold its next meeting in March. In addition, a meeting of state guaranty association board chairs is scheduled for May; it will be held in conjunction with the next MPC meeting. Mr. Falkenbach also updated attendees on recent activities of the NOLHGA Board.

Peter Gallanis provided an update on financial services modernization, noting that the Senate has entered into the discussion of insurance regulatory reform. Due in part to 2004 being an election year, he added, it is doubtful that any bill will be passed this year. The educational initiative undertaken by NOLHGA's Financial Services Modernization Committee is continuing.

  Staff Contact - Sean McKenna

Reminder: Conflicts Surveys and Antitrust Certifications Due March 5

On February 6, 2004, NOLHGA's Conflicts Policy and annual questionnaire were mailed to all NOLHGA personnel and representatives, including NOLHGA's Board members, committee and task force members, and consultants. At that same time, NOLHGA’s Antitrust Policy and certification forms were sent to all of the persons referenced above, as well as all NOLHGA members.

The conflicts questionnaire and antitrust certification must be completed on an annual basis. Responses are due by close of business on March 5. For those who have not yet completed and returned these items, we ask that you please do so right away.

These forms should only take a few minutes to complete, and your timely response is very important. Responses may be submitted by fax (703.481.5209) or mail and should be directed to the attention of Aimee Frye. Please feel free to call Aimee at 703.787.4115 if you have any questions or would like to request additional forms. As always, your assistance in this matter is greatly appreciated.

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