January 2007 MPC Meeting Briefing Book Posted
The briefing book for the upcoming MPC meeting, which will be held January 15-17, 2007, in Orlando, Fla., has been posted on the meeting Web page. Users may need to log in after clicking on the link to access the file, which can be found in the "Meeting Resources" section.
Due to the confidential nature of the briefing materials, only NOLHGA Board members, guaranty association administrators, members of guaranty association boards, and other association representatives who will attend the meeting as the designated voting guaranty association representative can access the briefing book. Other guaranty system representatives who need a particular insolvency status report should contact the appropriate NOLHGA staff contact.
The briefing book includes an updated meeting schedule, an attendee list, status reports for the upcoming meeting, and other meeting materials. It is in PDF format, and users will need Adobe Acrobat Reader to view and print the materials. Acrobat Reader is available free from Adobe.
If you have any trouble accessing the meeting Web page or briefing book, please contact Dan Hicks at [email protected] or 703.787.4112. If you have any questions about the meeting, contact Sean McKenna at [email protected] or 703.787.4106.
Staff Contact - Sean McKenna AMS Life Insurance Company (Ariz.)Estate to Close
The AMS receiver's efforts in 2006 have been focused primarily on the windup and closing of the AMS estate, including disposition of remaining estate assets, preparation of the final accounting, and coordination of final distributions to the guaranty associations. In addition to a limited amount of cash, the estate held assets consisting of approximately eight uncollected judgments and rights with respect to two streams of renewal commissions resulting from various settlements.
Efforts to collect on the judgments have not resulted in any significant recoveries for the AMS estate. Although AMS has continued to receive monthly payments representing the renewal commissions, the payment amounts are small, averaging about $465 per month over the last six months. The commission payments fluctuate from month to month depending on the number of policies renewed and will continue to shrink over time as policies lapse or are otherwise terminated or non-renewed. To facilitate closing of the estate, and as an alternative to abandonment of these assets, the judgments and renewal commissions were assigned to the Illinois Life and Health Insurance Guaranty Association for the benefit of the affected guaranty associations.
The receiver's petition for approval of the assignments was filed in early December 2006, along with a petition seeking approval of the final accounting and to close the estate. Hearing on these matters took place on December 18, and orders granting both petitions were entered at that time. Copies of the orders are available upon request.
Following the hearing, the receiver made a final distribution to the affected associations in the amount of $1,070,503.97. This distribution brings total guaranty association recoveries to $69,542,848.78, representing 67.64% of the guaranty associations' aggregate claim of $102,811,768.95. Recoveries under the assigned judgments and commissions, if any, will be applied by the guaranty associations to further reduce their outstanding claims. In the meantime, the AMS estate will be closed.
Task Force Chair - Luther Hill; Staff Contact - Joni Forsythe Legion/Villanova Life Insurance Companies (Pa.)N.H. Supreme Court Denies Claim for GA Coverage of Stop-loss Policy
On December 21, 2006, the New Hampshire Supreme Court ruled in favor of the New Hampshire Life and Health Insurance Guaranty Association (as well as the state property/casualty guaranty association), affirming a lower court decision that denied guaranty association coverage for a "specific excess loss" policy issued by Legion Insurance Company. The policy was owned by a multiple employer welfare arrangement trust.
The trust filed suit against both state associations seeking coverage of $412,971 in unpaid claims incurred before Legion was placed into rehabilitation in April 2002. The trial court granted the guaranty associations' motions for summary judgment, and the trust appealed. On appeal, the New Hampshire Supreme Court agreed with the lower court's findings. The court ruled in favor of the life and health association, finding that even if an "excess loss" policy could be considered health insurance under the guaranty association statute, it is not "direct" health insurance and is therefore not a form of insurance covered by the association. The court also ruled in favor of the property/casualty association, finding, among other things, that the trust itself was an insurer and that the statute bars payments due to insurers. For a copy of the opinion New Hampshire Motor Transport Ass'n. Employee Benefit Trust v. New Hampshire Ins. Guar. Ass'n., Merrimack No. 2006-003 slip op. (NH Sup. Ct. 12/21/2006), contact Meg Melusen at [email protected].
Task Force Chair - Pete Leonard; Staff Contact - Paul Peterson