Confederation Life (MI)
Payout Annuity Block Winner
As a result of the recent bid process, Pacific Life has been selected to acquire the $2 billion Payout Annuity Block held by the Separate Account created under the Confederation Life Plan. The bid process commenced immediately after the $197 million CTSL settlement money was received on November 23. There were two rounds of bids, culminating in Pacific Life's bid being accepted by the Separate Account Committee on January 20. The Confederation Life Task Force will report on the anticipated financial results and timetable for the transfer of the block at the Tucson MPC meeting in February.
Task Force Chair - Chuck LaShelle; Staff Contact - Centennial Life (KS)Garnishment Proceedings Stayed
The U.S. District Court, District of Kansas, on January 14 ordered a garnishment action against Centennial initiated by Universe Life in Rehabilitation (ID) stayed until the conclusion of the Centennial liquidation proceedings.
The Universe Rehabilitator had obtained a judgment in Idaho state court against Centennial. Thereafter, Universe initiated a garnishment action in federal court in an effort to attach certain reinsurance proceeds allegedly owed Centennial by its' Reinsurer, AXA Reinsurance, S.A. and AXA RE Life Insurance Company under contracts of reinsurance between Centennial and AXA. The memorandum and order are available on NOLHGANet's litigation site at KS0001.
The Receiver, on Jan. 21, released claims batch 13 of the Centennial health block, which included 2,300 claims for $830,000. The Receiver reports that the claims backlog is shrinking by 2,000 claims per week.
Task Force Chair - Mark Femal; Staff Contact - Universe Life (ID)Company Shell Sold
The liquidator has sold the company shell and its licenses to Builders Financial Group, a Florida Company. A hearing on the approval of the sale is scheduled on Feb. 11.
Task Force Chair - Tad Rhodes; Staff Contact - Fidelity Mutual Life (PA)Past Due Premium Tax Settlement Offered
The Rehabilitator mailed letters to state revenue departments Dec. 31, offering to settle past due premium taxes. For states with a premium tax offset, the offer was subject to "...the various credits and offsets that FML would have been legally entitled to had it paid its taxes and guaranty association assessments in the normal course...." As reported last week, the task force opposes any settlement of guaranty assessments that is conditioned upon state revenue agents accepting the FML rehabilitator's offer.
Counsel for the task force is negotiating with counsel for the rehabilitator to obtain an agreement under which guaranty association assessments would be paid. The task force expects to present the proposed agreement to the MPC in Tucson. The agreement would be subject to approval by the court.
Separately, the commonwealth Court on January 13 ordered the following:
1. All discovery relating to objections to the Rehabilitator's Third Amended Plan of Rehabilitation shall be completed by March 15.
2. Each objector to the plan and the Rehabilitator shall submit to the Court by March 22 a list of witnesses they will call at a hearing on objections to the plan
3. Each objector to the plan and the Rehabilitator shallexchange by March 29 documents they intend to introduce at a hearing on objections to the plan
4. Counsel for each objector and for the Rehabilitator shall attend a pre-hearing conference at 2:00 PM March 30, at which time the Court will fix a date shortly thereafter for a hearing on objections to the plan.
Task Force Chair - Frank Gartland; Staff Contact - Sean McKenna National Heritage Life (DE)Promissory Note Interest Rate Reset
The interest rate for the promissory note has been reset to 5.65%. This is down from the previous rate of 6.35%. The new rate is effective from Jan. 1 through June 30, 1999.
Task Force Chair - Dan Orth; Staff Contact -Legal Seminar Planning
The Legal Seminar Planning Committee is beginning preparations for the 1999 Legal Seminar. This year's seminar will be held at the Silvertree Hotel in Snowmass, Colorado (minutes from Aspen) on July 22nd-23rd The 1999 Planning Committee includes Frank O'Loughlin (Committee Chair), Charlie Richardson, Tad Rhodes, Jana Lee Pruitt, Jackie Rixen, Chuck Gullickson and Andrea Bowers. The committee has met by teleconference, and will be meeting for an in-person planning session in Tucson, Arizona the evening of February 17, 1999. Please call Chrissy Haley at (703) 787-4101 if you have any questions regarding the event, or suggestions regarding topics that you would like to see included in this year's program. We very much appreciate the enthusiasm and support of all of our members, and are striving to make this year's Legal Seminar the best yet.
Staff Contact - Joni ForsytheClaims Valuation Subgroup Meeting
On Friday, January 22, the Claims Valuation Subgroup of NOLHGA's Legal Committee met in Dallas to review guaranty associations' experiences with claim valuation issues in specific insolvencies. Ultimately, the subgroup hopes to provide guaranty associations with guidance on these issues. The subgroup's next meeting is scheduled for February 11, in Orlando.
Staff Contact -CALENDAR/CONFERENCE CALLS
Feb.11 Claims Valuation Subgroup Meeting, Orlando, FL
Feb. 17-19 NOLHGA MPC Meeting, Tucson, AZ
Feb. 17 Legal Seminar Planning Committee Meeting, Tucson, AZ
Feb. 25-26 NOLHGA Legal Committee, Tampa, FL
Feb. 26 GIC Litigation Working Group CANCELLED(Will be replaced with teleconference. Contact Angela Franklin 703.787.4105 for more information.)