First National Life (AL)
Court Approves Settlement
As reported in the March 26th Weekly Wire, the receivership court approved on March 4 a settlement bringing to a close litigation brought by Annie Banks against the First National Life estate (FNLIC). Under the settlement, a $1 million consent judgment was entered in favor of Ms. Banks and the Receiver recognized the consent judgment as a claim against the estate. However, the claim was left unclassified.
Ms. Banks filed a notice of claim seeking policyholder priority for her claim on July 8. The Receiver responded on July 20, asserting that, because Ms. Banks' claim arises out of a tort action judgment, and the claim was not recorded prior to the initiation of FNLIC's delinquency proceedings, her claim should be classified as a general creditor claim. In her response, the Receiver reserved the right to provide the court with additional reasons why the claim is not a policyholder priority claim.
Task Force Chair - Mike Marchman; Staff Contact - Joni Forsythe George Washington Life (WV)Early Access Funds Released
On July 19, the receivership court for George Washington Life Insurance Company approved the Receiver's petition for a fourth early access distribution to participating guaranty associations, and authorized an interim, partial distribution of 50% of participating guaranty associations' approved policyholder level claims. The Receiver sent checks this week totaling $1.96 million to the Alabama, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Missouri, Oklahoma, Pennsylvania, Puerto Rico, Tennessee, Texas, Virginia, and West Virginia associations.
Task Force Chair - Bart Boles; Staff Contact - Bill O'Sullivan National Affiliated Life (LA)Initial Meeting Held
On July 22, representatives from the task force and NOLHGA met with Louisiana Insurance Department officials in Baton Rouge to obtain general information on the company. Representing the task force and the domestic guaranty association were: Chuck Gullickson (SD) Task Force Chair, Phyllis Perron (LA), Van Mayhall (LA), Julie Fuselier (LA), Peggy Parker (VA), MPC Chair, Peter Gallanis, and Paul Peterson. Representing the Louisiana Insurance Department were Craig Gardner, Denise Brignac, Randall Stevenson and Ronnie Johnson.
Preliminary information provided by the Department indicates there may be little or no guaranty association involvement. The Department anticipates finalizing its strategy to handle the business by the end of August or early September.
A preliminary report should be distributed to the task force within the next few weeks. A task force meeting has been scheduled on Wednesday, August 25 from 1 to 2:50 pm at the MPC meeting in Coeur d'Alene, Idaho.
Task Force Chair - Charles Gullickson; Staff Contact - Paul Peterson Centennial Life (KS)Work on LTD Block Begins
The Centennial Working Group has been organizing data, along with the Receiver and LTD claim processor (DMA), to support a commutation of the LTD reinsurance agreements and possible assumption of the block of business.
A working group meeting was held June 17 and another will be held with the Receiver in Kansas City on August 10. These meetings focus on the actuarial value of the LTD block and the reinsurance offset. The working group hopes to use these informational meetings to establish a basis for beginning discussions with the current reinsurer, ERC. Because a number of claims are over guaranty association limits, and the Receiver will not likely be funding 100% of the ultimate policyholder claim liability, there are a few items that need to be ironed out.
On a related note, DMA is near completing a vigorous examination of all claims. The process was extended due to difficulty in obtaining all necessary support documents. States where LTD claim questions have arisen (as to over or under payments) will be contacted directly by DMA. This could take place over the next 60 days.
In a separate transaction, the Task Force is talking to potential buyers of the small block of life and guaranteed renewable health business.
The Working Group is also working with the Receiver on a potential Class I payout. Each guaranty association needs to report all administrative expenses through the second quarter of 1999 to Kristen Howell. This will assist the Working Group in making requests for Class I reimbursement.
Task Force Chair - Mark Femal; Staff Contact -ETC.
Long-time Pennsylvania Association Representative Passes Away
We are sad to report that Joseph (Joe) M. Hartley passed away on July 14 at his home in Gladwyne. He was being treated for pneumonia. Joe was with the Pennsylvania guaranty association since its inception in 1978 either as a Board member, administrator or counsel until six months before his death. The family suggests memorial contributions to Planned Parenthood Inc., 515 E. Lancaster Ave, St. Davids, Pa. 19087. Anyone wishing to send condolences to Joe's wife, Emmy Lu, should contact Holly Wilding for her address.
CALENDAR/CONFERENCE CALLS
August 3 Legal Committee Claims Valuation Subgroup, Denver, CO
August 6 Fidelity Bankers Task Force Meeting, O'Hare Marriott, Chicago
August 25-27 NOLHGA MPC Meeting, The Coeur d'Alene, Coeur d'Alene, ID