National Heritage Life (DE)
Weiss Captured
Shalom Weiss, the financier convicted of racketeering and fraud in the National Heritage Life case, was captured in Vienna, Austria according to the FBI. Weiss had been missing since October, 1999, but was convicted in absentia and sentenced to 845 years in prison. No further information on possible extradition is available.
Task Force Chair -Dan Orth; Staff Contact - Executive Life (CA)NOLHGA Files Amicus Brief
At the request of the Georgia association, NOLHGA has filed an amicus curiae brief with the Georgia Court of Appeals supporting the Association's position in litigation arising out of the Executive Life Insurance Company ("ELIC") insolvency. This case involves a claim by the Gilman Paper Company Deferred Compensation Plan (the "Plan") seeking coverage for a Guaranteed Investment Contract ("GIC") issued by ELIC in 1987. The GIC was held in Trust by the Plan's Maryland-based Trustee. The Georgia association denied coverage for the GIC on the grounds that it is an unallocated annuity held by a non-resident plan trustee, and is therefore not covered under the Georgia statute.
Based on the pleadings, the plaintiff in this case opted-out of the ELIC rehabilitation plan. In fact, the plaintiff appears to have filed an opt-out agreement expressly rejecting benefits offered under the rehabilitation plan. After having received estate distributions equal to approximately 80% of the (pre-insolvency) contract value of the GIC, the Plan filed suit against the association in Georgia Superior Court to collect the balance, approximately $700,000. In support of its claim, the Plan argued, among other things, that the GIC is an allocated annuity, and that Georgia resident plan participants qualify for coverage as the beneficial owners of the GIC.
On May 17, 2000, the Superior Court heard argument on the parties' cross motions for summary judgment and the Georgia association's motion to dismiss. Shortly thereafter an order of judgment for the plaintiff was entered by the Superior Court without any explanation as to the basis for the judgment.
The Association subsequently filed a Notice of Appeal and asked that NOLHGA submit an amicus curiae brief supporting its position on coverage and providing the court with a national perspective of the issues. NOLHGA's brief was filed on October 11, 2000. Briefing on appeal is now complete, and oral argument has been denied. Accordingly, the parties await the decision of the court.
Staff Contact - Joni Forsythe Bankers Commercial Life (TX)Claims Funding Reports Sent
Funding reports for September claim activity were sent to affected guaranty associations on Wednesday, October 25. With the funding of these claims, all backlogged claims should now be processed, with the exception of manually-filed non-medicare supplement claims. Funding is due to UTA within 10 days of approval of the claim information by the guaranty association.
With respect to non-medicare supplement claims, CSRG has been compiling claims that have been received to date and has completed an inventory of those claims. The data file has been sent to affected guaranty associations, and contains basic information for each claim (service dates, amounts, provider information, policy number, etc.). Guaranty associations may use this initial listing to research calls received from policyholders or providers, but should not use this information to pay any claims at this time. CSRG and Arthur Andersen are currently reviewing the data for accuracy and to determine if duplicate claim information is included. This process should be completed by the end of next week. Additional research will then be undertaken to determine if any claims had been paid by the previous TPA or by BCL.
Staff Contact - Paul Peterson American Standard Life (OK)Nicholas Appeals Early Access Order
On October 16, David J. Nicholas, former owner of ASL, filed an appeal of the Oklahoma District Court's order approving an early access agreement providing for a $8.68 million distribution to participating guaranty associations. Nicholas' appeal claims that the District Court erred in allowing the early access distribution without requiring the Receiver to perform an accounting and without reviewing or considering Nicholas' independent audit of ASL, which Nicolas maintains "showed ASL to be entirely solvent."
In anticipation that Nicolas would seek such an appeal, the Receiver previously filed a motion with the District Court for the posting of a bond in connection with any such appeal. The District Court has scheduled a hearing for October 27 to consider the Receiver's motion.
Staff Contact - Bill O'Sullivan1999 Assessable Premium Data
The 1999 Assessable Premium Data packages were mailed to all guaranty associations and insurance commissioners on October 27. They should be received by early next week. Questions should be directed to Paige Santos of PwC at 703.918.3959, or to Paul Peterson at NOLHGA.
CALENDAR/CONFERENCE CALLS
Nov. 9NOLHGA Legal Committee, Herndon, VA
Nov. 14-15NOLHGA MPC Meeting, San Antonio, TX
Nov. 15-17Joint NOLHGA, NCIGF, IAIR Seminar