American Chambers Life (OH)
Drug Card Arrangements Made
On June 7, Antares Management Solutions sent to guaranty associations via facsimile, a billing for drug card claims from Merck-Medco. As a result of ACLIC's insolvency, Merck's billings for the periods ending April 28, May 12 and May 26 are due and unpaid. Merck threatened to discontinue the drug card program unless arrangements were made for prompt payment of unpaid bills. The drug card program provides significant benefits to guaranty associations, including discounts on prescriptions and low administrative costs. In addition, were the program to be discontinued, Antares would process claims at a cost of $24 per claim.
The ACLIC task force has made arrangements with Merck for payment of drug card claims incurred on or after the May 8 liquidation date. The arrangements provide that the first batch of claims will be sent to affected guaranty associations for payment and includes a billing for a pre-funding amount that will be used by Antares to pay the next bi-weekly Merck billing within the 48 hour time period required by the agreement. Guaranty associations will have 15 days to pay claims as provided for under the service agreement.
On June 9 the task force will send to affected guaranty associations a proposal for payment of drug card claims incurred prior to the liquidation date.
In addition, Antares, on behalf of affected guaranty associations, has entered into an agreement with Cole Taylor Bank for processing of premium payments received by automated clearinghouse transfer.
Task Force Chair -Frank Gartland; Staff Contact - National Affiliated Investors Life (LA)Closing Scheduled
The closing has been scheduled for July 7. Guaranty association funding schedules and payment instructions were sent to affected guaranty associations on June 9. Funds are due on June 28 (if paid by check) or July 5 (if paid by wire transfer). Special instructions are included for those associations that will use promissory notes for the funding. The closing funding schedules are based on the information provided to guaranty associations in the May 1 opt-in package.
Guaranty associations unable to fund by the above dates should contact Paul Peterson immediately to make alternative arrangements.
Task Force Chair -Chuck Gullickson; Staff Contact - Paul Peterson Thunor Trust CompaniesFranklin American Life Opt-Out Packages Sent
On May 31, NOLHGA sent opt-out packages for a proposed assumption reinsurance agreement and early access agreement to the 14 affected guaranty associations. Under the proposed assumption reinsurance agreement, Investors Heritage Life Insurance Company would assume the covered obligations of the guaranty associations arising from the insolvency of Franklin American Life Insurance Company. Under the early access agreement, the FAL estate would provide approximately $33 million as early access to partially fund the assumption of the guaranty associations' approximately $49 million obligations. Investors Heritage would provide an enhancement in the form of a reinsurance allowance, and the participating guaranty associations would fund the balance. The opt-out period ends June 30, and closing is expected early in the third quarter.
Task Force Chair - Chuck LaShelle; Staff Contact -Stage 1 MPC Ballots Mailed
MPC and Preference Poll Committee Chair Peggy Parker has announced that Stage 1 ballots for the 2001 MPC chair were mailed to all guaranty associations on June 1. Those guaranty associations that have not yet received their ballots should contact Peggy Parker at 804.282.2240.
Legal Seminar Highlights
As a reminder, June 21st is the deadline for registering for NOLHGA's Ninth Annual Legal Seminar in Boston on July 20-21, 2000. In addition to Wall Street Journal reporter, Ellen Pollock, the Seminar will showcase two panel discussions exploring the ramifications of the Gramm-Leach-Bliley Act (GLB), the legislation passed last November that is already affecting the financial services industry. The brochure, which was distributed last week, includes a scenario which will be the basis of discussion for the first financial services modernization panel. The second of these two panels will feature industry and regulatory authorities discussing the implementation of GLB, its impact on regulation at the state and federal levels, and how the GAs and others might be affected.
Other Seminar highlights include discussions on managed care insolvencies, internet applications for insolvencies and the GA system, issues raised by the Thunor Trust insolvencies, civil recoveries against insurance company looters and more. Please contact Karen Early at 703-787-4101 with any questions.
Staff Contact -CALENDAR/CONFERENCE CALLS
July 20-21 NOLHGA Legal Seminar, Boston, MA
July 27 Claims Valuation Subgroup, Denver, CO