American Chambers Life Insurance Company (Ohio)

Assumption of Life Policies Nears Closing

Last week, NOLHGA entered into an Assumption Reinsurance Agreement with Madison National Life to assume a small number of individual life policies being administered by 14 of the 38 guaranty associations affected by American Chambers. The agreement was mailed to the 14 guaranty association administrators with instructions to return participation certificates to NOLHGA by Friday, March 22. Closing is scheduled for the last week of March.

NOLHGA anticipates the following guaranty associations will participate in the agreement: California, Delaware, Florida, Illinois, Indiana, Massachusetts, Michigan, Montana, Ohio, Oklahoma, South Carolina, Texas, Washington, and Wisconsin.

Task Force Chair - Chuck Gullickson;   Staff Contact - Bankers Commercial Life Insurance Company (Tex.)

Premium Distribution Made

Wire transfers and/or checks for premium collections made through New Era (December 2001 and January 2002 collections) were sent on March 13, 2002, to all affected guaranty associations with the exception of Missouri, Texas, and Utah, which receive their related premiums weekly from New Era. Approximately $528,000 was disbursed. Please contact Hazel Manclark (703.787.4110) or Gus Estrada (703.787.4131) if you do not receive your funds in the near future.

Task Force Chair - William Falck;   Staff Contact - Paul Peterson Executive Life Insurance Company (Calif.)

Aurora Eleventh Installment Billing Mailed

On March 8, NOLHGA mailed the eleventh Installment Billing to the ELIC participating guaranty associations (PGAs). The bill calls for the PGAs to pay approximately $67.4 million to Aurora on or before April 30, 2002.

Andersen conducted a cursory review of the bill upon receiving it in late January and noted several material exceptions that resulted in an overstatement of approximately $200,000 in the amount charged to the PGAs. The current bill reflects the initial corrections requested by Andersen.

Andersen is now conducting a more thorough review and, as in prior years, will provide the PGAs with a detailed report of its findings, along with billing instructions, within the next few weeks.

Task Force Chair - Art Dummer;   Staff Contact - Kentucky Central Life Insurance Company (Ky.)

Kentucky Central Receives $27 Million Settlement

The Kentucky Central estate received a $27 million settlement from Bank of Louisville to resolve the liquidator's claims arising out of a series of pre-liquidation financing transactions in which Kentucky Central effectively guaranteed loans made by the Bank to third parties. The litigation began in 1993 shortly after Kentucky Central was placed into receivership. The liquidator had won a partial summary judgment against the Bank of Louisville on many of his claims in November 2000. Although there are other parties and claims in the litigation that remain unresolved, the principal defendant was Bank of Louisville.

Task Force Chair - John Colpean;   Staff Contact - Joni Forsythe