3/12/2007 - State Filing Updates Cost Figures for Reliance Insolvency - As of the quarter ending September 30, 2006, Reliance Insurance Company, the largest U.S. property and casualty liquidation, has distributed nearly $1.3 billion to guaranty funds – most in the form of early access distributions. Overall estate expenses for the first nine months of 2006 total $79,698,417 according to the quarterly filing Pennsylvania Insurance Commissioner M. Diane Koken submitted January 26 to the Pennsylvania court.

Koken provided a comprehensive summary of the insolvency, noting that the 28-page filing does not fully reflect the effects of the liquidation on many of Reliance’s assets and liabilities because of several factors, including unknowns about the amount of recoverable reinsurance.

Click here to view the article.

3/12/2007 - Arrowpoint Seeks Control of Royal Indemnity - Arrowpoint Capital Corp. and its subsidiary Arrowpoint Capital LLC (“Arrowpoint”) , a newly formed organization owned by Royal & SunAlliance USA senior management and outside directors, entered into a purchase agreement to acquire control of all Royal & SunAlliance business currently owned by Royal & SunAlliance Insurance Group plc.

Royal Indemnity, a company now in runoff, is part of the Royal & SunAlliance Insurance Group plc.

As consideration for the acquisition, Arrowpoint, which reports a total of $10 in capital, will issue a subordinated promissory note in the face amount of $300 million. Royal & Sun Alliance plc, however, would make a new capital infusion into Royal & Sun Alliance’s US insurance entities in the amount of $287.5 million.

Click here to view the article.

3/12/2007 - Florida Company Placed into Receivership - On January, 2007 a Florida judge placed the Vanguard Fire & Casualty into receivership. Vanguard wrote homeowners coverage and was licensed only in Florida. The company incurred significant losses due to the 2004 and 2005 hurricanes.

3/12/2007 - New IRS Electronic Filing Requirements to Affect Many Guaranty Funds - In January 2005, the IRS released temporary regulations that required some of the larger tax-exempt guaranty funds to file the annual IRS Form 990 return electronically beginning with tax year 2005. The guaranty funds with $100 million or more in total assets and at least 250 returns annually were required to submit their 2005 annual exempt organization return electronically. Effective with tax year 2006, more guaranty funds will be required to submit electronically as the net asset requirement was lowered from $100 million to $10 million.

Click here to view the article.

3/09/2007 - Special deputy receiver set to close Millers Insurance Company Estate - In his report to the special master of January 29, 2007, the special deputy receiver for the Millers Insurance Company reported that reinsurance collections and claim payment activities are nearly complete, and he expects to close the estate in June 2007. The SDR also reported that he has scheduled on-site claims audits with several guaranty associations and that the estate will be performing desk audits of other guaranty associations in February and March, with the objective of completing the guaranty association POC approval process by May, 2007. The special deputy receiver estimates the final dividend for policyholder level claimants to be 60- 70%.

3/09/2007 - Groups Name Texas Property and Casualty Insurance Guaranty Association Among “Best Companies to Work for in Texas” - Deep in the heart of Texas, everything just seems naturally bigger. After all, “bigger” is the “Texas way.”

At the state’s guaranty association, it’s also “best,” judging by a recent distinction last month awarded to the Texas Property and Casualty Insurance Guaranty Association. The group netted a ranking of number 36 on the list of this year’s Best Companies to Work for in Texas.

Jointly sponsored by the publishers of Texas Monthly magazine, the Texas Association of Business, the Texas State Council of the Society for Human Resource Management and Best Companies, the program recognizes the best employers in the state. The annual ranking seeks to identify employers that make creating better workplaces for their employees a priority, say organizers.

Companies that made the list were selected by surveying management and employees. Surveys collected a range of information, including companies’ policies and procedures, facilities, health of organizational culture and overall employee experience.

Click here to view the article.

3/07/2007 - NCIGF Letter to NAIC Discourages Adoption of “Delaware Proposal” - The NCIGF again has weighed in on the large deductible issue with a letter to NAIC commissioners. The letter was sent March 7 in anticipation of a likely consideration by the NAIC’s Executive/Plenary Session of the “Delaware version” of the large deductible provision at the NAIC’s meeting later this month.

“We anticipate a large deductible provision for the Insurer Receivership Model Act (“IRMA”) will be presented for your review, comment and possible vote,” wrote Barb Cox on behalf of the NCIGF. “We urge you to vote against a proposal to adopt the ‘Delaware version’ large deductible provision.

“A vote in favor of the Delaware proposal, we believe, would have a significant and lasting impact on the property and casualty fund system and the public which ultimately pays the cost for the safety net.”

Cox’s letter also argued rigorously for the “Arkansas” large deductible approach, and urged the commissioners to vote for it “if the opportunity arises.”

Enclosed with Cox’s letter was Thomas Jenkins’ and Rowe Snider’s white paper, “Why Large Deductible Reimbursements Belong To Guaranty Funds.”

To view the full correspondence, click here.

3/06/2007 - NCOIL Adopts Model Act That Establishes Structural Building Requirements - The National Conference of Insurance Legislators (NCOIL) Executive Committee unanimously adopted a proposed Model State Uniform Building Code March 3 at NCOIL’s Spring Meeting in Savannah, GA.

The code, which encourages development and enforcement of strong construction requirements, seeks to promote mitigation by establishing structural building requirements to minimize losses from wind, flood and earthquake in areas with significant catastrophe exposure. It also would create a framework for a statewide system of building regulation.

“This development is important to the guaranty funds because strong building codes mean less damage to homes, which translates into fewer and lower claims associated with a storm-related insolvency,” said Roger Schmelzer.

Read NCOIL’s press announcement