September 1, 2021 Lincoln Memorial/Memorial Service Life Insurance Companies (Texas)

Appeals Court Upholds Verdict Against PNC Bank

On August 30, 2021, the U.S. Court of Appeals for the Eighth Circuit affirmed a judgment for over $106 million against PNC Bank in favor of Jo Ann Howard & Associates, as Special Deputy Liquidator; NOLHGA; and the Missouri, Texas, Illinois, Kansas, Oklahoma, Kentucky, and Arkansas life and health insurance guaranty associations (the “Plaintiffs”). The judgment arose from breach of trust and other claims that the Plaintiffs brought in connection with the insolvency of Lincoln Memorial Life Insurance Company, Memorial Service Life Insurance Company, and National Prearranged Services, Inc. In affirming the judgment, the Court of Appeals rejected arguments by PNC that the trial court (1) improperly calculated compensatory damages; (2) erred in awarding prejudgment interest; (3) improperly awarded punitive damages; and (4) exceeded its authority by awarding attorneys’ fees and declining to reduce the award.

Task Force Chair - Tad Rhodes;   Staff Contact - Paul Peterson

Annual Meeting Planning Continues

As many of our members have probably already assumed, plans for the 2021 Annual Meeting are in flux. As of today, the plan is still to conduct the meeting in-person in Nashville on October 26 and 27 (with an MPC meeting on October 25), but that decision is under review.

The decision to proceed with an in-person meeting had been made in early June, based on membership survey responses received at the end of May and then-improving conditions with respect to the pandemic. The original plan was that all in-person participants would be fully vaccinated, and we hoped to be able to meet without requiring masking or social distancing.

Unfortunately, since then the COVID Delta variant has swept the nation, and new cases nationally have multiplied to a level of roughly 20 times the lowest points in early June (8,558 on June 13 vs. 176,742 on August 27, per CDC reports). COVID hospitalization and death figures have followed suit, as in early pandemic “waves,” and many areas have reinstated mask mandates and social distancing requirements, or are considering doing so.

Under these circumstances, making reliable plans is difficult for everyone. Regarding the Annual Meeting, registrations are down somewhat, and in-person speakers are proving difficult to recruit. We are evaluating our options, and we hope to make a final decision on whether the meeting will be converted to an online meeting soon.

In the meantime, we encourage you to register for the Annual Meeting—you can do so here. If the meeting is moved online, we will refund all registration fees. We also encourage anyone booking their flights to book refundable tickets, in case the meeting moves to an online-only format.

We wish—as we know you do—that we did not face the circumstances that make decisions like these so difficult. More important, we wish that no one had to suffer the consequences of this pandemic. We will keep our membership apprised of developments. In the meantime, if you have any questions, please contact Sean McKenna at [email protected].

  Staff Contact - Sean McKenna

Miller to Replace Falkenbach as Delaware GA Executive Director

Jack Falkenbach, longtime Executive Director of the Delaware Life & Health Insurance Guaranty Association, will retire at the end of 2021. Barry Miller, currently the Controller of the association and Executive Director of the Delaware Insurance Guaranty Association, will succeed Mr. Falkenbach beginning on January 1, 2022.

Jack Falkenbach was appointed Executive Director of the Delaware Life & Health Insurance Guaranty Association in 1993. In addition to his work with the Delaware association, he has played an integral role in a large number of NOLHGA insolvency task forces and committees. He served as Chair of the task forces for Executive Life of New York, Time Insurance Company, and Coastal States Life Insurance Company; chaired various NOLHGA committees, including GA Laws and Communications; and co-chaired the Guaranty System Modernization Task Force. He serves as Board Chair and Secretary of the Guaranty Association Benefits Company (GABC). He also served as MPC Chair from 2003–2006 and served on the NOLHGA Board of Directors during the same time period.

Please join all of us at NOLHGA in thanking Jack for his tireless work on behalf of the guaranty system and in wishing him well on his retirement.

  Staff Contact - Sean McKenna

Kansas GA Seeks New Administrator

The Kansas Life & Health Insurance Guaranty Association is seeking a well-qualified candidate to fill the position of Association Administrator. The association is a nonprofit, industry-supported association that handles and pays, pursuant to state statute, insurance claims of Kansas residents if their life, health, or annuity insurer becomes insolvent.

The Administrator reports directly to the association’s Board of Directors and is responsible for carrying out the duties of the association. Ability to travel and effectively coordinate activities with other state guaranty associations through a national organization, with insurance receivers, and with regulators is essential. The candidate must possess insurance and management experience in an insurance company or related setting such as regulatory, legal, or consulting. A background in law, accounting, insurance finance, and/or actuarial science is desirable, and prior experience with an insurance guaranty association or in a receivership setting is a plus.

Send résumés on or before September 27, 2021, to Linda Becker, with a copy to Terry Tiede.

  Staff Contact - Sean McKenna