HARBIN ELECTED NOLHGA CHAIR
Orlando, Florida - The National Organization of Life and Health Insurance Guaranty Associations (NOLHGA) announced that Roger F. Harbin, executive vice president, SAFECO Life Insurance Company, was elected chair of the organization for 2001. Harbin joined SAFECO in 1977 and founded SAFECO's Structured Settlement Annuities and Banking Services Departments. Harbin is also a director of the Washington association. The announcement was made during NOLHGA's 17th Annual Meeting in Orlando, Florida.
In addition to Harbin's election as chair, David McMahon was elected vice chair, Thomas D. Potter was elected treasurer and Wilson D. (Dave) Perry was elected secretary. Potter is the chairman, president and CEO of the Lincoln Mutual Life Insurance Company. Potter also serves on the Boards of the ACLI, the Forum 500 at ACLI, and is a member of the Nebraska association board. Perry is assistant general counsel at Northwestern Mutual Life Insurance Company. He chairs the Montana association and the life insolvency committee of the Wisconsin Guaranty Fund. Perry also serves on the boards of the California, Georgia, Iowa, and South Dakota associations.
NOLHGA members also elected two new members to three-year terms on its Board of Directors, Ronald G. Downing and Merle T. Pederson. Downing is president and CEO of National Farm Life Insurance Company, which he joined in 1972. He is active in a range of insurance industry associations and serves on the boards of the Texas Life, Accident, Health & Hospital Service Insurance Guaranty Association, American Council of Life Insurance, and ACLI Forum 500, and chaired the ACLI's Compliance Section. Pederson, officer and counsel at the Principal Financial Group, currently serves on the guaranty association boards of the Colorado, Iowa, Minnesota, Montana, North Dakota and South Dakota, and is active on many industry-related committees, including those of the ACLI and NAIC.
Downing and Pederson replace George T. Coleman, vice president, government relations, The Prudential Insurance Company of America, and William R. Brown, general counsel and secretary, American United Life Insurance Company, who both served for six years on NOLHGA's Board of Directors.
In addition, William B. Fisher and David H. McMahon were reelected to three-year terms on the NOLHGA Board. Fisher serves as the vice president and associate general counsel at Massachusetts Mutual Life Insurance Company and served as NOLHGA chair in 2000. He is also a past chair of ACLI's Guaranty Associations Committee, chairs the Massachusetts association and is a director of the California, Connecticut, New Jersey and New Mexico Associations. McMahon is vice president of First Colony Life Insurance. He currently chairs the Virginia and Delaware associations and sits on the boards of the North Carolina, South Carolina and Washington associations.
NOLHGA coordinates the efforts of its member associations affected by an insolvency. NOLHGA is a voluntary organization of all 52 life and health guaranty associations (including Puerto Rico and the District of Columbia). Guaranty associations, by law, provide a safety net for policyholders in the event of an insurance company insolvency.
Centennial Life (KS)Commutation Agreement Approved
The District Court of Shawnee County, Kansas, on October 13 approved a Commutation Agreement and Release between the Centennial estate and ERC Group. Under the agreement, Centennial releases ERC from all obligations under the reinsurance treaties on the Centennial LTD block, and ERC pays Centennial $25.1 million. The funds were transferred to Centennial on October 13.
This commutation should enable the estate and affected guaranty associations to place the LTD block with a solid carrier on acceptable terms, which would have been much more difficult without a commutation due to the complexity of administration of the numerous treaties.
Task Force Chair -Mark Femal; Staff Contact - Inter-American Life (IL)Recovery Efforts Update
Recent activity in Inter-American has focused on the Liquidator's efforts to obtain reinsurance recoveries from Employer's Re and Alabama Re on behalf of the estate. In the Employer's Re case, judgment for the Liquidator was entered in May of this year, awarding the estate approximately $9.5 million, plus interest of approximately $1.6 million. Employer's Re has appealed that decision. Briefing on appeal is not expected to be completed before January of 2001.
The Liquidator's claim against Alabama Re has proceeded on a bifurcated track. The Liquidation court, where the claim was initially raised, fixed damages on the reinsurance claim at $23 million as of the liquidation date. However, the court also recognized that Alabama Re had certain rights under the reinsurance treaty which were to be decided through arbitration, including Alabama Re's rights with respect to the terminal accounting and setoff provisions in the treaty. That determination was confirmed by the court of appeals in Illinois. A panel of three arbitrators was convened to preside over the arbitration proceedings.
NOLHGA is not a party to the arbitration proceedings, but has continued to monitor the proceedings and to provide support and cooperation for the Liquidator, including the submission of an amicus curiae statement in support of the Liquidator's position with respect to certain privilege issues in discovery. The arbitration proceedings are now nearing completion. Hearing on the merits began September 18th and continued through September 26th. The panel thereafter requested briefing of closing arguments to be submitted by the parties on or before October 30th. A November 23rd meeting of the Panel has been scheduled, and the parties expect the panel's ruling to be made shortly thereafter.
Task Force Chair -William Falck; Staff Contact - Joni Forsythe American Chambers Life (OH)Claims Batch #9 Completed
Antares Management Solutions, Inc., the guaranty associations' third party administrator, has completed claims batch number 9. This batch, the largest so far, includes 12,700 checks for $3.5 million. Notices were sent to guaranty associations late in the week of October 16. Task Force Chair -Chuck Gullickson; Staff Contact -Bill Howard 703.787.4120
Staff Contact -Preliminary MPC Schedule
The following is a preliminary schedule of meetings for the November 14-15 MPC meeting in San Antonio at Le Mansion del Rio. The registration deadline is October 27. For more information contact Mary Ellen Cappetta at 703.787.4114. Hotel reservations should be made directly with the hotel at 210.518.1000.
TUESDAY, NOVEMBER 14
Centennial Life Task Force 1:00 pm - 2:00 pm
Bankers Commercial Life Task Force (Tentative)1:00 pm - 2:00 pm
MPC Executive Committee 2:15 pm - 3:00 pm
American Chambers Life Task Force Roundtable 3:30 pm - 5:30 pm
WEDNESDAY, NOVEMBER 15
Executive Life Task Force Roundtable 9:00 am - 11:00 am
MPC Luncheon 11:30 am - 12:15 pm
MPC General Session 12:15 pm - 3:00 pm
The Joint NOLHGA, NCIGF, IAIR Seminar will begin at 4 pm on Wednesday, November 15.
ETC
Hawaii Association E-Mail Information
The e-mail for Hiram Tanaka, Hawaii association executive director is [email protected]. The e-mail for Ken Scarborough is [email protected]. E-mail not specifically for Mr. Scarborough should be directed to Mr. Tanaka.
CALENDAR/CONFERENCE CALLS
Oct. 16American Chambers Task Force Teleconference, 4:30pm ET
Nov. 9 NOLHGA Legal Committee, Herndon, VA
Nov. 14-15 NOLHGA MPC Meeting, San Antonio, TX
Nov. 15-17 Joint NOLHGA, NCIGF, IAIR Seminar