ORDER NUMBER R 00-06 July
DIRECTOR’S APPROVAL OF ALHIGA’S RESPONSE
AMERICAN CHAMBERS LIFE INSURANCE COMPANY INSOLVENCY
By letter of June 13, 2000, the Alaska Life and Health
Insurance Guaranty Association (ALHIGA) has requested the
approval of the Director of Insurance to pay certain covered
claims on behalf of Alaska residents arising from the insolvency
of American Chambers Life Insurance Company (ACLIC). In response
to that request, the Director finds as follows:
- ACLIC is a "member insurer" of ALHIGA, as defined
in AS 21.79.900(6), as it existed prior to July 1, 2000.
ACLIC was licensed to sell health and life insurance in
the State of Alaska under Certificate of Authority #F-1612
dated November 20, 1985. This Certificate was suspended
by order of the Director dated March 6, 2000.
- By order dated March 13, 2000, the Court of Common Pleas,
Franklin County, Ohio issued an "Agreed Order Appointing
Rehabilitator" placing ACLIC into rehabilitation. Shortly
thereafter, the rehabilitator entered into an indemnity
reinsurance agreement with Continental General Insurance
Company, whereby a large percentage of ACLIC’s policies
were reinsured by Continental General. The rehabilitator
sent out cancellation notices to all certificate holders
not reinsured by Continental General.
- ALHIGA has been informed by the rehabilitator that notices
to Alaska certificate holders were dated March 30, 2000,
and indicated coverage would terminate November 1, 2000.
- On May 8, 2000, ACLIC was determined to be insolvent and
ordered liquidated by Judge Sherward of the Court of Common
Pleas, Franklin County, Ohio, Case No. 00 CVH03-2206. On
the same date, the court approved a Service Agreement between
the National Organization of Life and Health Guaranty Associations,
the rehabilitator/liquidator, and Antares Management Solutions,
LLC, under which Antares agreed to provide policy, claim,
and other services in connection with covered obligations
of affected state guaranty associations, including ALHIGA.
- Under AS 21.79.060(d), ALHIGA is required, with approval
of the Director, to take one of the following actions if
a member insurer becomes insolvent:
- guarantee, assume, reinsure, or provide the guarantee,
assumption, or reinsurance of the covered policies of
the insolvent insurer held by residents;
- assure payment to residents of the contractual obligations
of the insolvent insurer;
- provide money, pledges, notes, guarantees, or other
means necessary to discharge the insurer’s duties under
this subsection; or
- with respect only to life and health insurance policies,
provide benefits and coverages required under AS 21.79.060(e).
- ALHIGA plans to meet its statutory obligation to assure
payment of covered claims of Alaska residents who are ACLIC
policyholders by paying claims of such residents directly
or through the third-party administrator referenced in paragraph
4. ALHIGA also plans to file a timely proof of claim in
the ACLIC liquidation proceeding.
THE DIRECTOR HEREBY ORDERS:
ALHIGA’S request to meet its statutory obligations to
Alaska residents who are ACLIC policyholders by paying covered
claims directly or through the third-party administrator under
the Service Agreement referenced above is approved.
This order is effective July 11, 2000.