American Western Life Insurance Company (AWLIC) was founded in 1962. It was acquired by a California resident in 1985 and was licensed in 18 states. Although AWLIC was domiciled in Utah, its principal operating office was located in California. AWLIC primarily wrote individual and small group accident and health coverage and issued a limited number of life insurance policies. In the years immediately preceding its liquidation it entered the natural homeopathic health market through its issuance of “wellness” health insurance policies.
Conditions in the small group health insurance market deteriorated whereby a number of small group health insurers found it increasingly difficult to conduct business profitably. AWLIC was no exception. AWLIC’s owners made several unsuccessful attempts to sell the company during the mid 1990s. In 1996 AWLIC acquired a block of small group business from Congress Life Insurance Company. That block of business was primarily located in Arizona and was administered by a third party administrator (TPA) located in California. By the end of 1996 AWLIC had lost one half of its surplus and, as a result, submitted to voluntary Administrative Supervision by the Utah Department of Insurance in January 1997.
During the Administrative Supervision several blocks of business were transferred to other insurers or health plans. By May 1997 it became apparent that the liquidation of AWLIC was inevitable. In August 1997 a liquidation order was obtained from a Utah court.
At the end of 2000 all of the policy claims had been paid by the guaranty associations in the states where AWLIC was licensed. The Utah Insurance Commissioner as Liquidator of AWLIC was successful in litigation against AWLIC’s former officers and directors for mismanagement of the company. As a result of recoveries made in the settlement of the litigation against the former officers and directors, cost containment and the successful liquidation of AWLIC’s assets, all claims through Class 3 have been paid in full. It is anticipated that Class 6 general creditor claims will be paid in full once a release of liability is obtained from the Internal Revenue Service. Such a release was obtained from the United States Department of Justice in 2007. If the Internal Revenue Service enters into the Release Agreement as anticipated, the AWLIC estate will have sufficient assets remaining after payment of all Class 6 claims in full to pay a Class 8 interest dividend to all approved claimants.
The AWLIC Special Deputy Liquidator is Ronald Rosen.
Our Location:
215 South State Street, Suite 300, Salt Lake City,
UT 84111
T: (801) 983-6400; F: (801) 355-1013