Bankers Commercial Life (TX)

Distribution Made

NOLHGA has disbursed approximately $1.9 million representing premium collections due the guaranty associations that were received by the Bankers Commercial estate. With this payment, all premium collections through January 2001 have now been disbursed except for a $1,000,000 temporary holdback to be used to help fund expenses. We anticipate disbursing the remaining $1,000,000 sometime within the next 3 months.

New Era has recently mailed the claims funding report covering the period March 3 - March 9, 2001. This is the 5th weekly report mailed to guaranty associations. Guaranty associations should note that this report also includes amounts for the post March 1, 2000 "box" claim inventory. All claims for the post March 1, 2000 portion have been adjudicated; we anticipate the remaining checks for this portion of the inventory to be generated over the next few weeks. In addition, letters to providers confirming outstanding claims prior to March 1, 2000 were mailed March 5. Responses have already begun to be received at New Era. Adjudication of this portion of the inventory is anticipated to be completed by the end of August.

Guaranty associations should contact Paul Peterson at NOLHGA should they have any questions regarding the above items.

Task Force Chair - William Falck;   Staff Contact - Paul Peterson American Chambers Life (OH)

Proof of Claim to be Filed/Transition Date Extended

The American Chambers' claims bar date is May 8. As reported at the San Diego MPC meeting, the Liquidator has agreed to accept an omnibus proof of claim by NOLHGA on behalf of the 38 affected guaranty associations. The Task Force is in the process of making final changes in the draft POC distributed in San Diego to the associations and will submit it shortly to the Liquidator for comment.

As previously reported, Antares intends to close its Downers Grove office and transfer all claims files to its Westlake office for claims processing. However, the Downers Grove office will remain open for a few weeks beyond the original March 31st transition date to allow Downers Grove personnel to handle as many appeals, DOI inquiries and fax inquiries as possible before the operations are handed over to Westlake. We will provide updated contact information for Westlake when it becomes available.

Task Force Chair - Chuck Gullickson;   Staff Contact - Thunor Trust Companies

Frankel Extradited

On March 1, financier Martin Frankel was extradited to the United States where he will face charges related to the insolvency of the Thunor Trust companies. Frankel was extradited after German authorities thwarted an escape attempt.

Task Force Chair - Chuck LaShelle;   Staff Contact -

Federal Priority Statute Litigation

On March 8, the amicus subgroup of NOLHGA's Legal Committee voted to file an amicus curiae brief with the United States District Court for the District of Massachusetts in connection with litigation arising out of the 1989 insolvencies of American Mutual Liability Insurance Company and American Mutual Company of Boston. The litigation concerns the federal government's challenge of the Massachusetts liquidation priority statute and the time limitations established under state law for filing claims against insolvent insurers. More specifically, the government objects to the policyholder level treatment afforded the insurance guaranty associations under the Massachusetts statute and insists upon priority payment of federal claims ahead of guaranty association claims. The government also has taken the position that it is not bound by the statutory bar date for filing claims against the insolvent insurers' estates.

In order to facilitate the closure of these 11-year old estates, the Receiver previously met with government representatives to discuss options for responding to the government's objections. After attempts to resolve the issues failed, the Receiver filed a complaint on November 22, 2000 for declaratory judgment seeking a determination regarding the government's federal priority challenge. The federal government responded by filing a motion to dismiss the complaint for failure to state a cause of action.

Given the obvious significance of these issues to the insurance guaranty system, NOLHGA's amicus subgroup agreed to participate in the litigation by filing an amicus brief supporting the Receiver's position and opposing the government's motion to dismiss. NOLHGA anticipates filing its brief on Monday, March 19th.

  Staff Contact - Joni Forsythe

Weekly Wire Via E-Mail

Those recipients who wish to receive the Weekly wire via e-mail, and who have not already done so, should e-mail [email protected] requesting that they be added to the e-mail distribution list. Those receiving the Weekly Wire via e-mail will no longer receive it via fax.

  Staff Contact - Sean McKenna