Thunor Trust Companies
Requests for Proposals Sent
Requests for Proposals for the business of five of the affected companies were sent by overnight express July 6 to 25 individuals who had responded to the task force's solicitation letter. Solicitation letters were mailed June 9 to over 200 contacts. The aggregate business of the companies is shown below:
Company Contract Count Face Amount Gross Reserve
First National Life 30,426 497,001,395 86,136,425
Farmers and Ranchers 2,742 66,159,288 8,755,825
Family Guaranty Life 43,365 51,072,219 23,952,452
Franklin Protective Life 54,827 101,387,250 17,096,966
International Financial Services 17,108 97,897,051 12,782,530
Total 148,468 813,517,203 148,724,198
Potential purchasers who have received the RFP had until July 9 to schedule due diligence visits with the companies. Proposals are due August 14.
Task Force Chair - Chuck LaShelle; Staff Contact - National Affiliated Investors Life (LA)New Task Force Formed
National Affiliated Investors Life Insurance Company was placed into voluntary rehabilitation by the Louisiana Department of Insurance effective June 3, 1999. The action was taken after the company's parent, LifeOne, Inc. announced it would no longer continue investing resources in the company as the result of a recently overturned involuntary bankruptcy petition. LifeOne believed that the involuntary bankruptcy petition triggered significant regulatory controls that resulted in substantial additional costs to National Affiliated.
As a result of these actions, MPC Chair Peggy Parker has appointed a task force with Chuck Gullickson (SD) serving as chair. Other members of the task force include: Phyllis Perron (LA); Jack Boritas (MD); Andrea Bowers (SC); and Sye Leer (NM). Paul Peterson is the NOLHGA staff contact and will also serve as Project Manager. An initial meeting with the Louisiana Department of Insurance is scheduled for July 22. Information on the company will be provided to affected guaranty associations shortly thereafter.
As of Sept. 30, 1998 assets of the company were approximately $5.2 million with approximately 86% of premium writings located in LA, MD and NM. The company is licensed in 18 jurisdictions and is domiciled in LA. States where the company was licensed include: AL, DC, FL, IN, LA, MD, MS, MT, NE, NV, NM, OK, SC, SD, TN, TX, UT and WY.
Task Force Chair - Chuck Gullickson; Staff Contact - Paul Peterson National Heritage Life (DE)Promissory Note Rate Increased
The promissory note rate for the MetLife promissory notes has been set at 6.84 percent for the next six months. This is an increase from the prior six-month rate of 5.65 percent. Under the terms of the assumption reinsurance agreement, the note rate is reset every six months and is based on the five-year Constant Maturity Treasury rate plus 100 basis points (This is quoted as a bond equivalent yield). Questions regarding the calculation of the note rate should be directed to Greg Jacobs at 317.639.1000.
Task Force Chair - Dan Orth; Staff Contact - Centennial Life (KS)Claims Inventory Declining
Centennial Health Block claims inventory fell from 97,000 in August 1998 to 4,000 at June 30. In addition, about 1,500 claims that have been appealed are being reviewed. Because of the small number of claims remaining, and the time required to review the appealed claims, the Receiver will be sending claim batches monthly instead of semi-monthly.
With only a few certificates remaining in force, the TPAs servicing the Aegon Health Block are eager for guaranty associations to cancel all outstanding business that can be cancelled. Guaranty associations who have not yet acted on these certificates are urged to do so.
The task force began this week seeking companies to assume the Other Block, which includes several hundred juvenile term life policies, a few life conversion policies, and miscellaneous accident and health policies that cannot be cancelled.
Task Force Chair - Mark Femal; Staff Contact - Life of Indiana (IN)Estate Closed
On June 11, Marion Circuit Court Judge William Lawrence discharged the liquidator from all obligations and dissolved by operation of law Life of Indiana. The estate is officially closed.
Fidelity Mutual Life (PA)Rehabilitation Plan Hearing Delayed
The Commonwealth Court on June 28 issued an Order rescheduling the hearing on the Third Amended Rehabilitation Plan and the Rehabilitator's Stock Allocation Report. The hearing has been postponed until July 16. At that time, FML contractholders and persons may be heard concerning the fairness of the distribution of Group Stock in exchange for mutual membership interests. At the conclusion of the hearing or shortly thereafter the Court will hear oral argument regarding the Rehabilitator's Petition to Approve Policyholder Dividends and the Rehabilitator's Petition to Allow Access to Policyholder Dividends.
Task Force Chair - Frank Gartland; First Capital Life (CA)NOLHGA To Support Appeal by New Mexico
The amicus subgroup of NOLHGA's Legal Committee has granted NMLIGA's request for amicus support before the California Court of Appeals in connection with the First Capital Life insolvency. In this case, the New Mexico Association is challenging the trial court's denial of its claim for policyholder payments, and the receiver's payment of general creditor claims ahead of the Association's claims. The New Mexico Association paid approximately $800,000 in statutory benefits to New Mexico policyholders to supplement benefits that were provided in accordance with the receivership plan and proceedings. These payments were made after a demand by the New Mexico Superintendent of Insurance, and an order from the New Mexico ancillary receivership court. The California domiciliary receiver then refused to reimburse the association for these payments, notwithstanding a surplus of $16 Million in the estate. The receiver's refusal was based inter alia, on the contention that that NMLIGA had acted as a "volunteer" in making "discretionary" payments to the New Mexico policyholders beyond those expressly required by the plan. The trial court upheld the California receiver's refusal to reimburse the association finding. NOLHGA has agreed to appear in support of the New Mexico Association's claim for recovery of the so-called "discretionary" statutory benefits. NOLHGA's amicus brief will be filed on or before July 14.
Staff Contact - Joni ForsytheETC.
George Harrison
NOLHGA is pleased to announce that George Harrison has joined NOLHGA as Manager of Technology Systems. George will be responsible for the management of NOLHGA's computer network. George will work with Beth Watson, NOLHGA's Manager of Information Systems.
CALENDAR/CONFERENCE CALLS
July 12 NOLHGA Finance Committee Teleconference, 3:00 pm ET
July 13 NOLHGA Communications Committee Teleconference, 1:00 pm ET
July 15-16 NOLHGA Legal Seminar, Snowmass, CO