American Chambers Life Insurance Company (Ohio)

Reminder: GA Expense Claims Due May 31

In April 2005, NOLHGA asked the guaranty associations affected by the American Chambers Life insolvency to update their claims for ACLIC expenses from 2003 through 2004. As reported by Task Force Chair Chuck Gullickson at the Austin MPC meeting, claims and expense data should be submitted to NOLHGA online by May 31, 2005; states not submitting data by that date will be presumed to have no additional claims. Of special note, the task force is seeking financial data from only 2003 through 2004 as an update to the figures collected for inception through December 31, 2002. If there are any questions, please contact Meg Melusen or Gus Estrada at 703.481.5206.

Task Force Chair - Chuck Gullickson;   Staff Contact -

MPC Meets in Austin

The Members' Participation Council (MPC) met in Austin, Tex., on May 18, 2005. The following are summaries of task force insolvency reports presented during the meeting:

  Staff Contact - Sean McKenna American Chambers Life Insurance Company (Ohio)

Task Force Chair Chuck Gullickson (South Dakota) reported that a deal to sell one of the remaining estate assets--a piece of Chicago real estate in which the estate owns a half interest--has fallen through. The liquidator has requested an update on guaranty association claims for 2003 and 2004 (see related article, above).

Task Force Chair - Chuck Gullickson;   Staff Contact - Executive Life Insurance Company (Calif.)

The Executive Life MPC met in closed session.

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

Task Force Chair John Colpean (Michigan) reported that Paul Harnice has been named the new deputy liquidator of the KCL estate and that the deputy liquidator is eager to make a final plan distribution to the former Kentucky Central policyholders and to the participating guaranty associations. The complex calculations for the policyholder distribution are ongoing, and the guaranty associations have an unsatisfied claim of approximately $15 million for the post-closing policyholder benefits they provided. In addition, a large number of KCL records are being destroyed, and the task force is monitoring the process to ensure that no policyholder records are included.

Task Force Chair - John Colpean;   Staff Contact - Joni Forsythe Life & Health Insurance Company of America (Pa.)

Task Force Chair Linda Becker (Kansas) reviewed the status of the LHICA estate. In April 2005, the task force completed an assumption reinsurance agreement with Philadelphia American Life Insurance Company to assume LHICA's guaranteed renewable AD&D policies, military allotment policies, single premium whole life policies, and universal life policies. Policy administration and claim payments on the remaining policies continue to be handled by R.N. Swanson & Associates. An omnibus proof of claim was prepared by Baker & Daniels and distributed to the guaranty associations at the meeting.

Task Force Chair - Linda Becker;   Staff Contact - London Pacific Life & Annuity Company (N.C.)

Task Force Chair Frank Gartland (Ohio) provided an overview of recent activity, noting that the sale of the life business (which took place before liquidation) will close in June. He added that the task force expects the "stayback" business to run off fairly quickly. Guaranty associations need to report their expenses by the end of May 2005.

Task Force Chair - Frank Gartland;   Staff Contact - Paul Peterson Metropolitan Mortgage Companies (Ariz., Idaho & Wash.)

Task Force Legal Counsel Charlie Richardson (Baker & Daniels) reported that the three companies remain in rehabilitation. The rehabilitators are coordinating a search for buyers, with proposals due by May 27, 2005. A deal could be closed by summer or early fall, and the task force is monitoring the sale process.

Task Force Chair - Art Dummer;   Staff Contact - Midwest Life Insurance Company (La.)

NOLHGA General Counsel Bill O'Sullivan reported on a litigation issue centering on the receiver's contention that 10 guaranty associations that received litigation recoveries should forgo receiving additional distributions from the estate and should reimburse the estate for portions of distributions previously received. The receiver now plans to close the estate and has given notice to the 10 guaranty associations to be heard in court on the issue of the litigation proceeds. Task Force Chair William Falck (Florida) announced that because of this issue, a Midwest Life Guaranty Association Litigation Group has been created.

Task Force Chair - William Falck;   Staff Contact - Bill O'Sullivan National Health Insurance Company (Tex.)

Task Force Chair William Falck (Florida) provided attendees with information on the company structure and reviewed the possible solutions being considered by the Texas Department of Insurance. The task force continues to monitor the situation.

Task Force Chair - William Falck;   Staff Contact - Reliance Insurance Company (Pa.)

Task Force Chair Tad Rhodes (Oklahoma) reported that the task force expects the assumption reinsurance agreement with Madison National Life Insurance Company on the "truckers policies" to close soon. The task force is pursuing reimbursement of the guaranty associations' administrative expenses, but there is some uncertainty surrounding previous distributions to the associations involving payment of stop-loss claims.

Task Force Chair - Tad Rhodes;   Staff Contact - Summit National Life Insurance Company (Pa.)

Task Force Chair Tad Rhodes (Oklahoma) reported that $35 million remains in the estate, which the receiver is eager to close. To date, guaranty associations have been reimbursed for 96% of their expenses.

Task Force Chair - Tad Rhodes;   Staff Contact - Paul Peterson States General Life Insurance Company (Tex.)

The States General MPC met in closed session on May 17, 2005. During the MPC General Session on May 18, Task Force Chair Tad Rhodes (Oklahoma) reminded affected guaranty associations that their responses to the cancellation survey that was recently distributed are needed immediately.

Task Force Chair - Tad Rhodes;   Staff Contact - Joni Forsythe Thunor Trust Companies

Task Force Chair John Colpean (Michigan) reviewed the pending civil cases and the completed criminal cases relating to the Thunor Trust companies. The task force continues to monitor asset recovery efforts.

Task Force Chair - John Colpean;   Staff Contact -