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Utah Insurance Receivers Office
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National Annuity Company (NAC) was initially licensed in 2004 and issued annuity contracts to residents in the State of Utah. The first annuity contracts were issued in February 2005. NAC’s principal office was located in Camarillo, California. The Utah Insurance Department examiners discovered that NAC’s assets were invested in mortgages and unsecured obligations that were non-admissible and, as such, rendered NAC insolvent. Efforts by the Utah Insurance Department to have NAC re-structure its assets so that they would be admitted, have NAC establish a Utah principal office and have Utah residents act as directors proved unsuccessful. As a result, the Utah Department of Insurance sought and obtained a liquidation order for NAC in March 2007. The Utah Life and Health Insurance Guaranty Association (ULHIGA) provided coverage for NAC’s annuitants up to $200,000 of current account value of their annuities as of March 23, 2007, the date NAC was ordered liquidated. Crediting rates on the annuities were lowered from what NAC offered to either 4% or 3% pursuant to Utah statute. ULHIGA was able to reinsure NAC’s annuities with American Underwriters Life Insurance Company (AUL), an Arizona insurer licensed in the State of Utah, effective January 1, 2008. Approximately 400 NAC annuities were transferred to AUL as a result of the Assumption Reinsurance Agreement that was entered into by the Liquidator of NAC, ULHIGA and AUL. Seventeen annuity contracts exceeded the maximum covered by ULHIGA and the amount over the $200,000 current account value of those annuities as of March 23, 2007 remain a claim against the NAC liquidation estate. Approximately $9 million of NAC’s invested assets were transferred to AUL as part of the reinsurance of the NAC annuities. The Liquidator is in the process of marshalling the other assets which include sub-prime mortgages, some of which have gone into foreclosure; unsecured debt; railroad tank cars and ownership positions in privately placed real estate investment trusts (REITs). The Liquidator has booked significant write-downs to those assets that have gone into default or for which property has been repossessed as a result of mortgage foreclosures. The deterioration in the real estate market nationwide has severely impacted the liquidator’s ability to sell real estate owned (REOs) that were acquired through foreclosures at a price that will cover the amount NAC loaned on the mortgages that were at one time unsecured in NAC’s name. The California office will be closed in the beginning of the second quarter of 2008 and administrative affairs will be handled by the Liquidator's staff remotely and from the Liquidation office in Salt Lake City, Utah. It is anticipated that assets will be continued to liquidated for a number of years before any distributions to approved claimants can be made. All persons who may have an interest in the assets of NAC including annuitants, their agents and other creditors have been given notice of the liquidation and the claim filing requirements. The last date to file a Proof of Claim in the NAC liquidation proceeding is March 14, 2008.
The Special Deputy Liquidator
of NAC is
Ronald Rosen. Our location: |