MPC Meets in San Antonio

The following are summaries of task force insolvency reports presented during the Members' Participation Council meeting held November 15 in San Antonio, Texas. The Executive Life and Fidelity Bankers Task Forces met in closed session.

  Staff Contact - Sean McKenna American Chambers Life (OH)

Meeting in a roundtable format, the task force reported primarily on efforts to establish production and quality standards with the TPA managing American Chambers claim processing. Task Force Legal Counsel Charlie Richardson described an agreement with the TPA that spelled out the performance standards and financial remedies if these standards are not met.

Task Force Chair -Chuck Gullickson;   Staff Contact - American Western Life (UT)

Task Force Legal Counsel John Finston apprised attendees that the Receiver has indicated that he would not accept most NOLHGA task force expenses as class 1 claims. Finston noted that the task force was not likely pursue those expense claims with the receiver because the costs associated with doing so would likely offset any gains in expense reimbursements. Moving forward, Finston said that the task force would pursue early access distributions at the policyholder priority level from the estate.

Task Force Chair -Chuck Renn;   Staff Contact - Bankers Commercial Life (TX)

Task Force Chair William Falck reported that the proposed sale of the Bankers Commercial business to United Teacher Associates would not be consummated. The task force is examining its options with regard to selling the company.

Task Force Chair -William Falck;   Staff Contact - Paul Peterson Centennial Life (OK)

Task Force Chair Mark Femal provided background on the insolvency and projected that distributions by March 31, 2000 would amount to 100 percent of class 1 claims and 85 percent of class 3 claims. Legal Counsel Charlie Richardson provided a status report on the sale of the LTD block to Hartford Life. Richardson held out some hope that the agreement could close by year-end. In addition, the MPC approved a resolution that would allow the task force to shorten the opt-out period for the Hartford agreement to 20 days.

Task Force Chair -Mark Femal;   Staff Contact - Guaranty Security Life (FL)

MPC Chair William Falck reported that the receivership is winding down. According to the receiver, there is approximately $12-16 million in assets available for distribution in December or January, pending resolution of tax issues. Peggy Parker, the NOLHGA representative to the GRC board, reported on the status of GRC.

Task Force Chair -William Falck;   Staff Contact - Bill O'Sullivan Kentucky Central Life (KY)

Task Force Chair John Colpean reported on the status of asset recovery and distributions from the KCL estate. According to staff contact Bill Howard, at this time guaranty associations' claim is approximately $27 million for policyholder priority claims and $7 million for expenses. Given the current financial status of the estate, future distributions are likely and that guaranty associations claims may be fully paid, with interest. Task Force Legal Counsel Kevin Griffith reported on the Receiver's efforts in litigation against parties involved in the insolvency. The task force is also in the process of considering the costs and benefits associated with the outstanding litigation.

Task Force Chair -John Colpean;   Staff Contact - Joni Forsythe Mid-Continent Life (OK)

Task Force Chair Sonya Ekart apprised attendees that the courts had approved the assumption of Mid-Continent policies by American Fidelity. The American Fidelity assumption includes a 17-year guaranty of level premiums and the establishment of a $17.5 million fund that would further support level premiums after the 17 year guaranty. The agreement would not require any guaranty association funds. In addition, Ekart told attendees that additional information is available at the Mid-Continent website at www.midcontinent.com.

Task Force Chair -Sonya Ekart;   Staff Contact - Bill O'Sullivan National Heritage Life (DE)

Task Force Chair Dan Orth told attendees that the NHL trust was set to close on January 22, 2001 and would have 90-day winding down period for a final accounting. In addition, the MPC was shown a recent 60 Minutes segment on the criminal activity in the case.

Task Force Chair -Dan Orth;   Staff Contact -