MPC Meets in D.C.

The Members' Participation Council (MPC) met in Washington, D.C., on October 12, 2009. The General Session featured a closed-session presentation by the Lincoln Memorial & Memorial Service Life Insurance Companies (Texas) task force and a presentation by outgoing MPC Chair Bart Boles (Texas) reviewing his three years as MPC Chair. Task force meetings for Medical Savings Insurance Company (Indiana) and Penn Treaty Network America Insurance Company/American Network Insurance Company (Pennsylvania) were also held.

One task force insolvency report was presented during the meeting:

  Staff Contact - Sean McKenna Golden State Mutual Life Insurance Company (California)

Task Force Chair Lowell Miller (North Carolina) provided an overview of the company, which was placed in conservation on September 30, 2009. The task force is coordinating its efforts with the California Department of Insurance and the Conservation and Liquidation Office and plans to participate in the RFP process as the department seeks to sell the company or its blocks of business.

Task Force Chair - Lowell Miller;   Staff Contact - Consumers United Insurance Company (Delaware)

Court Approves Resolution of PBGC Dispute

On October 10, 2009, the Delaware receivership court signed a Stipulation and Order resolving a longstanding dispute between the Consumers United (CUIC) receiver and the Pension Benefits Guaranty Corporation (PBGC). The PBGC serves as a federal guarantor of private employee benefit plans across the country. When CUIC was placed into liquidation in May 1994, the PBGC brought suit to terminate the pension plan of CUIC's parent company and asserted a claim against the parent for $943,100 in unfunded liabilities.

In an effort to clarify what claims, if any, the PBGC might assert against the CUIC estate, the receiver reached an agreement with the PBGC. The parties have stipulated that any claims by the PBGC constitute Class IV federal claims under the priority scheme of the Delaware Code. The parties further stipulated that the PBGC will not assert a claim unless and until the estate assets are sufficient to cover the receiver's administrative expenses and satisfy claims under Classes I through III of the priority scheme, which include policyholder claims. For further information or a copy of the court's order, please contact Meg Melusen at NOLHGA ([email protected]).

Task Force Chair - Peggy Parker;   Staff Contact - States General Life Insurance Company (Texas)

Court Approves Asset Recovery Settlement

On October 22, 2009, the District Court for Travis County, Texas, entered an order approving the settlement of claims in litigation against former officers, directors, and affiliates of States General. This litigation was commenced by the Special Deputy Receiver in December 2006 asserting claims against former officers, directors, and affiliates and seeking recovery of certain preferences and fraudulent transfers. Hearing on cross-motions for summary judgment took place in early 2008, and the matter was thereafter referred for mediation.

Following lengthy negotiations, the parties have agreed to a settlement and release of all claims. The settlement results in a $450,000 recovery for the estate, much of which will inure to the benefit of the affected guaranty associations. The litigation having been resolved, the Special Deputy Receiver hopes to proceed with closing this estate during the first quarter of 2010.

Task Force Chair - Tad Rhodes;   Staff Contact - Joni Forsythe

IAIR insolvency Workshop Scheduled for April 2010

The International Association of Insurance Receivers (IAIR) has scheduled its 2010 Insolvency Workshop for April 22-23 in Miami. Guaranty association administrators and board members are welcome. Topics and the agenda for the workshop will be available on the IAIR Web site when finalized. The two guaranty association administrators currently serving on the IAIR board are Dan Orth (Illinois) and Lowell Miller (North Carolina).

  Staff Contact - Sean McKenna