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J. RAY BARRIOS, #3915
General Counsel
WASATCH CREST INSURANCE
COMPANY IN LIQUIDATION
Parkside Office Tower
215 South State Street, Suite 300
Salt Lake City, Utah 84111
Telephone: (801) 595-8222
Attorney for Liquidator

 

IN THE THIRD JUDICIAL DISTRICT COURT IN AND FOR SALT LAKE COUNTY,

 STATE OF UTAH, SALT LAKE DEPARTMENT

 

In re

)

 

)

WASATCH CREST INSURANCE

)   REPORT ON

COMPANY IN LIQUIDATION

)  STATUS OF LIQUIDATION

 

)  ESTATE FOR PERIOD ENDING

 

)  DECEMBER 31, 2008

 

) 

         Respondent.

)

 

)  Civil No. 030915527

 

) ( 030915528 is consolidated with 030915527)

)
 

)  Judge Kate A. Toomey

 

 
        The Court appointed Liquidator of Wasatch Crest Insurance Company in Liquidation  ("WCIC"), Utah Insurance Commissioner, Kent Michie, (" Liquidator"),  successor in office to Merwin U. Stewart, by and through his Special Deputy Liquidator, Len W. Stillman, herein files this Report On Status Of Liquidation Estate For Period Ending December 31, 2008 pursuant to the Liquidation Order issued July 31, 2003, and pursuant to Utah Code Annotated, Section 31A-27-314. The estate of Wasatch Crest Mutual Insurance Company (Civil No. 030915528) is consolidated with the estate of Wasatch Crest Insurance Company in Liquidation (Civil No. 030915527).

        The Liquidator sets forth herein a Report on the status of the liquidation estate and a Financial Report of assets and liabilities of the liquidation estate of WCIC including the current assessment of liabilities from all claims filed against the liquidation estate. The attached Exhibit "A" Financial Report, was prepared by Jackie Muro of Vida Consulting, Inc., Los Angeles, CA under the direction of the Court appointed Special Deputy Liquidator, Len Stillman.

       
         The Liquidator herein reports to the Court regarding significant and/or ongoing events and activities in the liquidation of WCIC as follows:

Brief History (This item will continue to appear in these reports for the convenience of the Court.)

Wasatch Crest Insurance Company (WCIC) (FKA Home Fire Insurance Company, Utah Home Fire Insurance Company, Wasatch Crest Casualty Company, Transunion Casualty) wrote all personal lines except life insurance. WCIC also assumed reinsurance from affiliated companies Wasatch Crest Mutual Insurance Company, (WCM) and First Continental Life Insurance Company (FCL) as well as other non-affiliates.  WCIC was a subsidiary of Wasatch Crest Group (Group). Group sold WCIC to Wasatch Crest Mutual Insurance Company on January 1, 2003. Group also owned First Continental Life Insurance Company which it sold the third quarter of 2004.

Administrative Update    

Estate activity related to evaluating claims has been completed. Remaining claim activity is being handled by the affected Guaranty Associations. The Special Deputy is sending reinsurers claim information and collecting reinsurance. The company no longer has any employees. Remaining administrative work is done by independent contractors. Litigation activity and related expense has ended.

Furniture and equipment owned by the estate has been sold.
 

Claims

 Class 3 claims not covered by GAs were paid at 100% of allowed amounts in December 2006.  The paid total of those claims is $254,029.31.

Only certain Guaranty Association (GA) claims remain undetermined. The particular issues surrounding valuing workers compensation claims involve the long-term nature of payments to injured workers. Certain GAs have yet to finalize their claims in the estate. There has been one objection to the Liquidator’s Notice of Claim Determination. That objection was heard in July, 2006 by a Special Master. The Liquidator prevailed in that objection as well as in a subsequent appeal to the liquidation court. The claimant appealed to the Utah Supreme Court which had poured the case over to the Utah Court of Appeals but has now reasserted jurisdiction. The matter remains pending. The Utah Life and Health Insurance Guaranty Association is also a defendant in that case. (After the preparation of this report, the Supreme court found in favor of the claimant.)
 

Affected Guaranty Associations (UT, ID) (MT, NV and CA now closed) are reporting periodically and paying claims in the ordinary course of business. GA proof-of-claim forms are filed as “contingent” due to the ongoing claim activity. The Liquidator anticipates that all Class 3 level claims will be paid in full. Guaranty Association claims for administrative expenses (class 2) will also be reviewed and paid to the extent allowed. The Special Deputy made an “early access” distribution to the Utah Property and Casualty Guaranty Association in the first quarter of 2005 of $869,731.50. During the fourth quarter of 2006, the Special Deputy sought and received court approval to make another early access distribution to all affected guaranty associations to the full extent of their approved class 2 and class 3 claims.  The total amounts distributed to GAs are as follows:
 

 

 

UT P&C

UT L&H

CA

ID

NV

Class 2

$94,165.46

$50,489.57

$108,235.22

$9,376.00

$2,849.56

Class 3

$1,769,028.50

0

$2,000.00

$6,356.00

0

Total

$1,863,193.90

$50,489.57

$110,235.22

$15,732.00

$2,849.56

Other Claims

General creditor class claims are not covered by the guaranty associations.  All class 6 (general creditor class) claims have been determined except for a Class 6 reinsurance claim which is from Wasatch Crest Mutual Insurance Company, in Liquidation.
 

Records

Ancient records of the WCIC company and its predecessor companies have been reviewed. Records no longer considered necessary for either historical or practical use have been destroyed pursuant to the liquidation order entered in this case.

All public information regarding the liquidation including GA contacts, liquidation orders, web-based and downloadable POC forms and other information is available on the Utah Insurance Receivers' Office web site at www.utinsreceivers.org.

Financial statements for the estate and the quarterly reports for the estate are also available on the Liquidator’s internet website.

There have been no material changes in the financial position of the company since the last report other than reserve adjustments due to GA activity. Since cash has been paid out to claimants, investment income to the estate has been reduced.

Reinsurance

The Special Deputy Liquidator has determined that there is available reinsurance for some direct and assumed business and is tracking and collecting the recoverable amounts.

Miscellaneous

 WCIC engaged counsel to pursue subrogation claims against insurance companies and individuals who owed the company reimbursement for payments made. Subrogation collections against insurance companies are complete. The Deputy Liquidator has contacted outside counsel involved with open items and sought a resolution of open subrogation. To the extent that amounts are deemed uncollectible, the cases have been abandoned. As of the date of this report, certain of those cases remain open and payoffs are being negotiated. Cases assigned to in-house counsel have been abandoned pursuant to counsel’s recommendations.

 


Dated this ____ of February, 2009.

 


Wasatch Crest Insurance Company
In Liquidation


__________________________________
Lennard W. Stillman,
Special Deputy Liquidator
Wasatch Crest Insurance Company
In Liquidation



________________________________
J. Ray Barrios, Estate General Counsel



CERTIFICATE OF MAILING

I hereby certify that I mailed a true and correct copy of the foregoing Quarterly Report On
Status Of Liquidation Estate For Period Ending December 31, 2008, to the following claimants
 or parties who have requested general notice in this case, first class postage prepaid, this ____ day of February, 2009

Utah Insurance Commissioner
Kent Michie, as Liquidator of WCIC
Utah Insurance Department
3110 State Office Building
Salt Lake City, Utah 84112

Allen Muhlestein
Utah Property & Casualty Guaranty Association
P.0. Box 1626
Sandy, Utah 84091-1626

_____________________________