May 9, 2008

MPC Meets in Raleigh

The Members' Participation Council (MPC) met in Raleigh, North Carolina, on April 30, 2008. The following are summaries of task force insolvency reports presented during the meeting:

  Staff Contact - Sean McKenna Executive Life Insurance Company (California)

The Executive Life MPC made a closed-session presentation.

Task Force Chair - Art Dummer;   Staff Contact - Bill O'Sullivan Executive Life Insurance Company of New York (New York)

The ELNY MPC made a closed-session presentation.

Task Force Chair - Jack Falkenbach;   Staff Contact - Metropolitan Mortgage Companies

Task Force Legal Counsel Charlie Richardson (Baker & Daniels) updated attendees on the Washington rehabilitator's proposal to sell Western United Life Assurance Company. Negotiations on the sale, which would not trigger the guaranty associations, continue.

Acting Task Force Chair - Bart Boles;   Staff Contact - National Heritage Life Insurance Company (Delaware)

Task Force Chair Dan Orth (Illinois) and Task Force Legal Counsel Frank O'Loughlin (Rothgerber, Johnson & Lyons) updated attendees on a recent $27 million ruling in favor of the estate in the Bear Stearns litigation. An appeal is expected.

In other news, proceeds on a mortgage that had been purchase by five participating guaranty associations to help fund the estate's asset recovery litigation were received by the estate in April 2008 and should be distributed to the associations in the near future. The estate also received $2.3 million from a mortgage held by Stonewell Corporation that had been the subject of significant legal action.

Task Force Chair - Dan Orth;   Staff Contact - Reliance Insurance Company (Pennsylvania)

Task Force Chair Tad Rhodes (Oklahoma) reported that the 10 remaining large disability claims should be resolved by the end of 2008 with no payments made by the guaranty associations or the Reliance estate. In light of continuing administrative expenses being incurred by guaranty associations in responding to audit requests from the estate, the task force has decided to discuss with the receiver an approach that would minimize expenses incurred solely in connection with such audits.

Task Force Chair - Tad Rhodes;   Staff Contact - States General Life Insurance Company (Texas)

Task Force Chair Tad Rhodes (Oklahoma) reported that a status hearing was held in late April 2008. The Directors and Officers litigation is ongoing, but the task force expects it to conclude in time for the estate to close in October of this year.

Task Force Chair - Tad Rhodes;   Staff Contact - Joni Forsythe Universe Life Insurance Company (Idaho)

Task Force Chair Tad Rhodes (Oklahoma) updated attendees on settlement negotiations with the trusts currently pursuing litigation against the Universe Life estate. Talks are ongoing, and the task force hopes that an agreement will be reached sometime in May or June.

Task Force Chair - Tad Rhodes;   Staff Contact - Paul Peterson

MPC Meeting Features Presentations on Financial Services Modernization & More

The MPC general session also featured a presentation by a new insolvency monitoring task force, as well as an update on the work being done by NOLHGA's Life and Annuity Privacy Working Group by the group's Chair, Candie Kinch (Idaho). NOLHGA President Peter Gallanis reported on recent developments concerning financial services modernization on Capitol Hill, and MPC Chair Bart Boles (Texas) reported on the activities of the MPC Executive Committee.

In addition, the Administrators Education Steering Committee conducted a GA Education Day on April 29, with presentations on new products, long-term-care insurance, NOLHGA's Accounting Guidelines Manual, and subrogation rights.

Many of the presentations from the MPC meeting and GA Education Day are available to authorized users on the NOLHGA Web site. Users should go to the Events section and use the drop-down menus at the bottom of the page to select the appropriate MPC meeting. Users will have to log in to access the presentations.

  Staff Contact - Sean McKenna