American policyholders liquidating trust

Posted by / 09-Oct-2019 22:49

In hearings in her courtroom and in marathon discussions, regulators, creditors, bondholders, health insurers, and the company's owners, led by New York investment firm Broadbill Partners LP, fell to arguing over the corpse of Penn Treaty.

The owners didn't see why Penn Treaty couldn't just jack up its fees, as if it were a badly funded health insurer struggling to realign claims and premiums.

Briefs of amici curiae urging affirmance were filed for the Bureau of Insurance, Commonwealth of Virginia, et al. Martin; for the National Conference of Insurance Guaranty Funds et al. James Foley; for the National Conference of Insurance Legislators by Stephen W. Such priority shall be in lieu of any other similar priority that may be authorized by law as to wages or compensation of employees. All claims under policies for losses incurred, including third party claims, all claims against the insurer for liability for bodily injury or for injury to or destruction of tangible property that are not under policies, and all claims of a guaranty association or foreign guaranty association. The court held that the Ohio priority scheme regulates the "business of insurance" because it protects the interests of the insured. Applying Pireno, the court determined that the Ohio statute (1) transfers and spreads the risk of insurer insolvency; (2) involves an integral part of the policy relationship because it is designed to maintain the reliability of the insurance contract; and (3) focuses upon the protection of policyholders by diverting the scarce resources of the liquidating entity away from other creditors. One judge concurred separately on the ground that the Mc Carran-Ferguson Act was not intended to modify the longstanding, traditional state regulation of insurance company liquidations. Relying upon the same test to reach a different result, one judge dissented. Such a conclusion [runs counter to the basic rule of statutory construction that identical words used in different parts of the same Act are intended to have the same meaning.] Sullivan v. But I should have thought that a law enacted to determine the priority of creditor claims in proceedings to liquidate an insolvent insurance company either is the regulation of the business of insurance or is not.

Wisener; for the Council of State Governments et al. Wahoske; for the National Association of Insurance Commissioners by Susan E. Officers and directors shall not be entitled to the benefit of this priority. 907 (1992), to resolve the conflict among the Courts of Appeals on the question whether a state statute governing the priority of claims against an insolvent insurer is a "law Compare the result reached by the Sixth Circuit in this litigation with Gordon v. As an initial matter, it would be unusual to conclude that the meaning of the phrase "business of insurance" is transformed from one clause to the next. The equitable result is attractive enough, given the conflicting interests here.

There are other troubled long-term-care insurers in Pennsylvania. Wolf took office, though, the state seems to have abandoned its old policy of resisting big rate increases by long-term-care companies that sold policies here but failed to predict the true costs of such care.

As my colleague Harold Brubaker has reported, four life-insurance companies - Genworth, Unum, John Hancock, and Met Life - have been asking for fat double-digit increases on long-term policies, and getting them from Pennsylvania officials.

Fabe argued that the federal priority statute does not preempt the Ohio law because the latter falls within § 2(b) of the Mc Carran-Ferguson Act, which provides, inter alia: "No Act of Congress shall be construed to . This is so whether the claims of policyholders are ranked first under the state law or dead last. Relying upon the tripartite standard for divining what constitutes the "business of insurance," as articulated in Union Labor Life Ins. Instead, it operates to allocate the assets of a defunct insurer. 453, 460, the federal priority statute must yield to the conflicting Ohio statute to the extent that the latter furthers policyholders' interests. With him on the briefs were Solicitor General Starr, Assistant Attorney General Gerson, Deputy Solicitor General Mahoney, and William Kanter. Claims under nonassessable policies for unearned premium or other premium refunds. The remainder of such claims shall be postponed to the class of claims under division (H) of this section. Claims filed late or any other claims other than claims under divisions (G) and (H) of this section. Surplus or contribution notes, or similar obligations, and premium refunds on assessable policies. Section 1012 reads: (a) State regulation The business of insurance, and every person engaged therein, shall be subject to the laws of the several States which relate to the regulation or taxation of such business. 119 (1982), the court considered three factors: "` first, whether the practice has the effect of transferring or spreading a policyholder's risk; second, whether the practice is an integral part of the policy relationship between the insurer and the insured; and third, whether the practice is limited to entities within the insurance Reasoning that the liquidation of an insolvent insurer possesses none of these attributes, the court concluded that the Ohio priority statute does not involve the "business of insurance." App. But the subject of the regulation in the case before us is quite different from the portion of the Arizona statute held to be the business of insurance in National Securities. No payment by an employer to an employee shall be treated as a gratuity. Claims, including those of any governmental body for a penalty or forfeiture, shall be allowed in this class only to the extent of the pecuniary loss sustained from the act, transaction, or proceeding out of which the penalty or forfeiture arose, with reasonable and actual costs occasioned thereby. S., at 462, but not when the official acted to ensure that the merger was not "[i]nequitable to the stockholders of any insurer," id., at 457.

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The State's prerogative to do so, however, does not emanate from its recognized power to enact laws regulating the business of insurance under the Mc Carran-Ferguson Act, but from the longstanding decision of Congress to exempt insurance companies from the federal bankruptcy code.

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