Executive Life Insurance Company (CA)
Oregon Court Denies Additional Benefits For Unisys Plan Participants
The Circuit Court for Marion County, Oregon, on Jan. 8 found in favor of the Oregon Life and Health Insurance Guaranty Association, rejecting the claims of Unisys Corporation for additional statutory benefits for individual employee participants of the Unisys Savings and Retirement Plans. The court concluded that the contract owner is not an Oregon resident and furthermore, that the Oregon statute does not provide for coverage of unallocated annuities held by non-governmental plans.
The Executive Life Insurance Company GICs at issue were purchased by Mellon Bank, as trustee, in compliance with ERISA provisions which require that employee benefit plan assets be held by a plan trustee. The court was not persuaded by Unisys' argument that the individual employees should be treated as the contract owners because they are the "beneficial owners" of the contracts. As reflected in the testimony of Unisys corporate director Charles A. Service, no portion of the ELIC GICs ever was allocated to specific individual participants. In rejecting Unisys' claims, the Oregon court joins ranks with courts across the United States which have found the Unisys contracts to be unallocated annuities.
Task Force Chair -- Art Dummer; Staff Contact - Coastal States Life Insurance Company (GA)FICA MARKETING AND THE North Carolina insurance commissioner on Dec. 11 petitioned the Georgia Supreme Court for a writ of certiorari in the decision by the Georgia Court of Appeals. The appeals court on Dec. 2 reversed the liquidation court's judgment granting priority to the claims of FICA Marketing and the commissioner.
Task Force Chair -- Jack Falkenbach; Staff Contact - Guaranty Reassurance Corporation (FL)GUARANTY REASSURANCE CORPORATION AND Midland National Life Insurance Company completed the week of Jan. 5 the first true-up on the assumption reinsurance transaction that closed Nov. 3. Final opt-out results are now available. Total policy values at Oct. 31 - the effective date of the assumption reinsurance transaction - were $645 million. Approximately 11 percent ($71.3 million) of policy values were paid to policyholders who opted out, and $573.7 million in policy values were transferred to Midland.
GRC retained about 300 polices, valued at $3 million, to assure through the end of 1998 its federal income status as a life insurance company.
Task Force Chair -- Frank Gartland; Staff Contact - Bill O'Sullivan National Heritage Life Insurance Company (DE)THE ANNUAL EFFECTIVE rate for the promissory note with Metropolitan Life Insurance Company now is 6.74 percent. This rate will remain in effect for the next six months. The previous six-month rate was 7.46 percent.
Task Force Chair -- Dan Orth; Staff Contact - Old Faithful Life Insurance Company (WY)DISTRICT COURT JUDGE Terrence L. O'Brien on Dec. 30 filed an Order to Make Final Distribution, Approve Distribution Agreement and Close Estate in the Old Faithful Life Insurance Company insolvency. The corporate existence of Old Faithful and any subsidiaries and affiliates is terminated and dissolved. All prior distributions - including early access - are final. A final distribution of $897,648 will be made to Class 3 creditors. Affected guaranty associations will receive $853,712.
Task Force Chair -- Frank O'Loughlin; Staff Contact -ETC.
MPC Hotel Reservations Deadline
Jan. 22 is the deadline to reserve a room for the Feb. 23-25 MPC meeting in San Diego. Call the U.S. Grant Hotel at 800/237-5029 and mention NOLHGA to assure the special rate of $140 per night. Attendees are encouraged to guarantee their rooms for late arrival. Brochures will be mailed the week of Jan. 12. Please call Krista Plumhoff at 703/787-4121 with any questions.
New Kansas Address
The Kansas Life and Health Insurance Guaranty Association has moved. The new address is: 2909 S.W. Maupin Lane, Topeka, KS 66614-4139. Please note that the area code has changed: PHONE - 785/271-1199; FAX - 785/271-0242.
New NOLHGA Phone Numbers
REMINDER: NOLHGA staff has new direct dial numbers. For a complete list, please refer to the memorandum distributed via fax Dec. 31. A copy will be posted on NOLHGANet. NOLHGA's main phone and fax numbers have not changed: PHONE - 703/481-5206; FAX - 703/481-5209.
New Hampshire's New Chairman
Russell C. Simpson, vice president and treasurer of Chubb Life Insurance Company, on Jan 1 became chairman of the New Hampshire Life and Health Insurance Guaranty Association. Congratulations and best wishes to former chairman Frederick H. Condon, who retired Dec. 31. Mr. Condon was Chubb's senior vice president and general counsel.
CALENDAR
Jan. 13: NOLHGA Compensation Committee, 8:30 am EST, Herndon, Va.
Jan. 13: Kentucky Central Asset Management Committee, 9 am EST, Frankfort, Ky.
Jan. 14: Confederation Life Task Force, Tampa Fla., 8 am - Noon EST
Jan. 14: Litigation Meeting, Noon - 5 pm EST, Hyatt Regency Westshore, Tampa, Fla.
Jan. 15-16: NOLHGA Legal Committee, Tampa, Fla.
Jan. 19: NOLHGA's offices closed in observance of Martin Luther King Jr. Day
Jan. 29-30: NAIC/IAIR Liquidators' Workshop, La Jolla, Calif.
Feb. 2-3: NOLHGA Board of Directors, MPC Executive Committee and Insolvency Task Force Chair, San Diego
Feb. 3-4: NOLHGA Board of Directors, San Diego
Feb. 23-25: Members' Participation Council, San Diego