National Affiliated Investors Life (LA)

Assumption Reinsurance Agreement to Close July 7

As a reminder, closing on the National Affiliated Investors Life assumption reinsurance agreement will take place on July 7th in Baton Rouge, Louisiana, at which time all of NAIL's in-force business will be assumed by Citizens Security Life Insurance Company and United Liberty Life Insurance Company. Based on responses received to date, we expect there will be 100% participation by the affected guaranty associations.

Guaranty association funding schedules and payment instructions were faxed to affected guaranty associations on June 9th. Funds are due no later than June 28th (if paid by check) or July 5th (if paid by wire transfer). Those guaranty associations that will be funding with a promissory note should contact Paul Peterson for special instructions. Also, any guaranty association that is unable to fund by the above-stated dates should contact Paul Peterson immediately to make alternative arrangements.

Staff is working with the Louisiana Department and the assuming carriers to finalize a letter to the policyholders announcing the assumption. That communication is expected to be mailed by the end of this week.

Task Force Chair -Chuck Gullickson;   Staff Contact - Paul Peterson Centennial Life (KS)

Court Activity

On May 26, there were two significant events in the Centennial litigation. In the jury trial of the claims between and among Centennial's former management, its former reinsurer (AXA) and a reinsurance broker, the Kansas Federal Court reached decisions on all issues, and entered a judgment of approximately $160,000 in favor of the broker against AXA. There were no monetary judgments in favor of or against any other parties. The Centennial Liquidator was not a party to this litigation, having settled in 1999 its dispute with AXA. Separately on May 26, the Centennial Liquidator filed a complaint in the Kansas liquidation court against Centennial's former audit firm, KPMG Peat Marwick.

Task Force Chair -Mark Femal;   Staff Contact -

Guaranty Association Model Act Survey

Early this week, the Model Laws subgroup of the NOLHGA Legal Committee mailed a survey to all guaranty association administrators asking for input regarding their state's consideration, views and/or experience with the recent amendments to the NAIC Life and Health Insurance Guaranty Association Model Act. This information is being requested to assist the Legal Committee in preparing a report for the guaranty associations on the several amendments to the model act since 1997. The purpose of this report is to provide the guaranty associations with a comprehensive analysis and explanation of the key amendments, as well as a discussion of their significance in terms of protecting important guaranty association interests. The report is also intended to provide an overview of important implementation issues and the experience of states to date with these amendments.

You are asked to complete the survey and return it to Bill O'Sullivan at NOLHGA by June 30, 2000. Your input and assistance in this matter is necessary and is greatly appreciated.

  Staff Contact - Bill O'Sullivan

Legal Seminar

June 21st is the registration deadline for the Legal Seminar. The Legal Seminar will be held at the Fairmont Copley Plaza on Thursday and Friday, July 20-21st.. The Fairmont is located in Boston's Back Bay district within walking distance of many Boston attractions. NOLHGA has negotiated a favorable room rate of $165 for seminar attendees which will be honored for the entire week of the event including the following weekend. The hotel's number is (617) 267-5300. Registrants should indicate they are attending the NOLHGA Legal Seminar in order to receive the reduced rate.

  Staff Contact -

ETC.

Woodward To Depart June 30

After ten years at NOLHGA, Manager of Insurance Services Dana Woodward has resigned. Dana has accepted as a position as marketing project manager with Star Chef Alliance, Inc., where she will be working to develop the company's website. NOLHGA wishes Dana well and thanks her for her ten years of service to the organization and the guaranty association system.

CALENDAR/CONFERENCE CALLS

June 27 Claims Valuation Subgroup, Denver, CO

July 20-21 NOLHGA Legal Seminar, Boston, MA