London Pacific Life & Annuity Company (N.C.)

True-up Funding Payments Due Soon

As a reminder, true-up funding schedules were e-mailed to affected guaranty associations on October 12, 2007. This true-up is related to the assumption reinsurance agreement with Philadelphia American Life Insurance Company (PALIC) that closed on October 1 (the e-mail also contained an Excel file listing the final policies and related values assumed by PALIC). These payments will finalize the assumption reinsurance transaction with PALIC, other than the accounting for death claims incurred prior to the effective date, which will be finalized within 180 days from closing (around March 31, 2008). The task force expects this to be a minor amount since it will simply represent the difference between the death benefit and the net cash surrender value included in the closing.

Please note that amounts due to guaranty associations will not be distributed until funds are received from those guaranty associations owing funds and from PALIC, so prompt payments will be appreciated. Payments are due October 26 (if by check) or October 30 (if by wire transfer). Guaranty associations that need to remit funds are: Arizona, Arkansas, Colorado, District of Columbia, Georgia, Indiana, Kansas, Kentucky, Maryland, Michigan, Minnesota, Missouri, Montana, Nevada, New Mexico, Ohio, Oklahoma, Oregon, South Carolina, Tennessee, Utah, Washington, and Wisconsin.

Task Force Chair - Frank Gartland;   Staff Contact - Paul Peterson

MPC Meets in Amelia Island

The Members' Participation Council (MPC) met in Amelia Island, Fla., on October 8, 2007. The following are summaries of task force insolvency reports presented during the meeting:

  Staff Contact - Sean McKenna Benicorp Insurance Company (Ind.)

Task Force Chair Frank Gartland (Ohio) provided attendees with an overview of the estate and the voluntary transfer plan developed by the Indiana Department of Insurance to move policyholders to UnitedHealthcare. The task force has recommended canceling the remaining policies for which the guaranty associations are now responsible, in keeping with the terms of the policies. Project Manager Mark Femal (Strohm Ballweg LLP) reviewed the TPA service agreement and explained how current claims are being processed and the anticipated funding process to be made by the guaranty associations. Benicorp Special Deputy Receiver Randy Lamberjack reported on the efforts made to solve the problems Benicorp had been experiencing with claim adjudications.

Task Force Chair - Frank Gartland;   Staff Contact - Paul Peterson Diamond Benefits Life Insurance Company (Ariz.)/Life Assurance Company of Pennsylvania (Pa.)

Litigation Review Task Force Chair Tad Rhodes (Oklahoma) reported that the guaranty associations will receive $1.5 million from a distribution related to litigation recoveries. A final estate distribution is expected in early December.

Litigation Review Task Force Chair - Tad Rhodes;   Staff Contact - Paul Peterson Executive Life Insurance Company (Calif.)

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 (N.Y.)

The ELNY MPC made a closed-session presentation.

Task Force Chair - Jack Falkenbach;   Staff Contact - Life & Health Insurance Company of America (Pa.)

Task Force Chair Linda Becker (Kansas) reported that the task force hopes to settle an assumption reinsurance agreement with Philadelphia American Life Insurance Company for 94 policies in December 2007. The task force plans to pursue alternatives for the LTC block and the small block of other health policies not assumed by Philadelphia American. All LHICA estate assets are expected to be transferred to the guaranty associations by year-end.

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

Task Force Chair Frank Gartland (Ohio) reported that the assumption reinsurance agreement with Philadelphia American Life Insurance Company closed on October 1. There will be true-up for the assumption agreement by October 31 and another six months after the closing date for death claims incurred prior to the effective date. Once this true-up is complete, the only remaining estate activity is asset recovery.

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

Task Force Chair Tad Rhodes (Oklahoma) reviewed the history of the estate and reported that the task force is working with New Era on a true-up and experience sharing relating to the company's assumption of SGLIC's major medical lines. The task force has also continued to work with the special deputy receiver and affected states to resolve outstanding issues with respect to statutory deposits. An agreement for assignment of the deposits to the affected associations has been finalized.

Task Force Chair - Tad Rhodes;   Staff Contact - Joni Forsythe Universal Health Care Insurance Company, Inc. (Fla.)

Task Force Chair Mike Marchman (Georgia) reported that the judge has not yet ruled on the liquidator's petition to remove the case from federal court.

Task Force Chair - Mike Marchman;   Staff Contact - Paul Peterson

MPC Meeting Features Presentations on Structured Settlements, IRMA & More

The MPC meeting also featured the second installment of a workshop on structured settlement annuities sponsored by the Administrators' Education Steering Committee. The workshop was conducted by Tom Ronce (Pacific Life Insurance Company) and Joel Glover (Rothberger, Johnson & Lyons).

In addition to the task force reports described above, the MPC general session included a report on recent developments concerning the NAIC's Insurer Receivership Model Act (IRMA) and its possible adoption by various state legislatures. NOLHGA President Peter Gallanis updated attendees on recent developments concerning financial services modernization on Capitol Hill, and MPC Chair Bart Boles (Texas) reported on the activities of the NOLHGA Board and the MPC Executive Committee.

  Staff Contact - Sean McKenna

Assessment and Capacity Reports Posted to NOLHGA's Web Site

Updated versions of NOLHGA's annual Assessment and Capacity Reports have been posted to the NOLHGA Web site. They can be found in the Public Content section under "Facts and Figures--Assessment Data."

NOLHGA annually compiles information from guaranty associations on assessment activity--whether assessed, called (billed), or refunded. This information is used to generate various reports reflecting capacity or assessment activity (amounts assessed, called, or refunded) by insolvency, state, year, or account. Please note that all amounts are in thousands.

The reports cover the period from 1988 to 2006 and contain assessment information on over 200 insolvent companies. If any guaranty association personnel note an error in the data, please submit corrected information to Paul Peterson at [email protected] or 703.787.4119.

  Staff Contact - Paul Peterson