Guarantee Security Life (FL)

GSLIC Receiver Recovers $3.2 Million

The GSLIC receiver recently recovered $3,265,000 from the U.S. Department of Justice, representing funds that former owner Mark Sanford forfeited in federal criminal proceedings against Transmark, the holding company for GSLIC, controlled by Sanford.

The task force will be working with the receiver to obtain a distribution of these funds.

Task Force Chair - Frank Gartland;   Staff Contact - Bill O'Sullivan Mid-Continent Life (OK)

OK Commissioner To Seek Negotiated Settlement

According to a recent article in the Daily Oklahoman, newly elected Insurance Commissioner Carroll Fisher, acting in his capacity as receiver for Mid-Continent, plans to drop a lawsuit against Florida Progress Corporation and seek a negotiated solution to Mid-Continent's financial problems. The lawsuit, which was brought by former Insurance Commissioner John P. Crawford, claimed that Florida Progress was liable for alleged misrepresentations and other misconduct in the sale of Mid-Continent's extra life policies. During Mid-Continent's receivership proceedings, former Commissioner Crawford had stated his intent to use recoveries from Florida Progress to fund Mid-Continent's reserve deficiency on the extra life policies.

In other Mid-Continent developments, task force representatives met with Florida Progress representatives on January 7. The Florida Progress representatives stated their desire to resolve Mid-Continent's problems through negotiation rather than litigation. They also indicated that Florida Progress would be proposing a new rehabilitation plan for Mid-Continent and requested guaranty association review and input. The new plan is not expected to result in guaranty association financial obligations. Finally, the task force representatives are in the process of arranging meetings with Commissioner Fisher and other department officials to discuss recent developments in the case.

Task Force Chair - Sonya Ekart;   Staff Contact - Bill O'Sullivan

Interstate Compact Receivership Law Update

The Receivership Law Advisory Committee has been working closely with industry and other representatives over the course of the last two years to develop proposed uniform receivership legislation to submit to the Interstate Insurance Receivership Commission (the "Compact Commission"). An exposure draft of the uniform receivership law ("URL") was released last May for industry comment. After multiple drafting and comment sessions, a final draft was submitted to the Commission and adopted on September 14, 1998.

The proposed legislation is targeted to be introduced for enactment in the compacting states (Michigan, Nebraska and Illinois) during the upcoming year. The URL may also be considered by non-compacting states. In particular, California has an effort underway to enact a modified version of the URL. NOLHGA, along with other interested parties, has been invited to attend a meeting in California next week to review and comment on the pending California proposal.

During the next few months, NOLHGA staff will be working with Legal Committee members to prepare a summary analysis highlighting the key provisions of the URL. That report will be distributed to our members later this year and should serve as a useful reference for members in states where the uniform receivership law will be considered for possible legislative action.

On a related note, Jackson National Life Insurance Company has submitted a proposal to the Receivership Law Advisory Committee to modify the claims priority provision in the Uniform Receivership Law. In its proposal, Jackson National advocates treatment of GICs and funding agreements as insurance policies entitled to class 2 claim priority. The Advisory Committee has requested comments and recommendations with respect to this proposal. On January 12, 1998, a subgroup of NOLHGA's Legal Committee joined ACLI Guaranty Association Committee members on a teleconference to review and discuss preliminary reactions to the proposal. NOLHGA staff and Legal Committee members will continue to coordinate with ACLI staff in preparing comments and recommendations with respect to the Jackson National proposal.

  Staff Contact - Joni Forsythe

Engagement Letters For Consultants

The NOLHGA legal department has prepared form engagement letters for use in retaining counsel, project managers, and financial and actuarial consultants for insolvency task forces. These forms will provide a format for engaging consultants that can be quickly tailored to individual task force needs, while consistently reflecting NOLHGA's position on the engagement of outside consultants. Copies of the forms will be distributed for use by NOLHGA staff who work on insolvency matters.

  Staff Contact -

ETC.

Membership Dues Invoices

Invoices for 1999 membership dues will be mailed the week of January 18 to guaranty association administrators. As always, prompt payment to NOLHGA's lockbox is appreciated. Please direct questions to Jay Jagolta at 707/787-4109.

CALENDAR/CONFERENCE CALLS

Jan. 18 Tucson MPC Meeting Registration and Hotel Reservation Deadline

Jan. 19 Audit Committee Teleconference, 1:30 p.m. ET

Jan. 22 Legal Committee Claims Valuation Subgroup, Dallas, TX 10-3, CT

Feb. 25-26 NOLHGA Legal Committee, Tampa, FL