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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
________________________________________________________________
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In
re
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WASATCH CREST INSURANCE
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QUARTERLY REPORT ON
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COMPANY
IN LIQUIDATION
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STATUS OF LIQUIDATION
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ESTATE FOR PERIOD ENDING
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DECEMBER 31, 2007, AND REQUEST |
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FOR ORDER OF APPROVAL
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Respondent.
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) Civil No. 030915527
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) (
030915528 is consolidated with 030915527)
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) Judge
Kate A. Toomey
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________________________________________________________________
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 Quarterly Report On Status Of Liquidation
Estate For Period Ending
December 31, 2007 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, liabilities
and expenses 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 under
the direction of the Court appointed Special
Deputy Liquidator, Len Stillman. The statements
of assets and liabilities are for the period
ending June 30, 2007, and the
statements of
receipts and disbursements are for the period
beginning with the date of the Liquidation Order
and ending
June 30, 2007. The report utilizes
the reporting format for receiverships
established by the National Association of
Insurance Commissioners, (NAIC) which does not
address valuation methods.
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 WCM and
First Continental Life Insurance Company (FCL) as
well as other non-affiliates
including New England Re and various reinsurance
pools. 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 is related to evaluating claims, sending
reinsurer’s claim information and collecting
reinsurance. The claims bar
date passed on July 31, 2004. The corporate shell
that had been for sale has been withdrawn from the
market as none
of the interested parties has followed through
with the required paperwork and maintenance of the
charter constituted a small
but perceptible drain on estate assets. The last
two employees, one full time and one part time,
have left the company.
Therefore, the company no longer has any
employees. Remaining administrative work is done
by independent contractors.
Litigation against a former affiliate has ended in
findings in favor of the defendant.
As a
result, litigation activity and related expense
has ended.
.Claims
Class
3 claims not covered by GAs have been paid at 100%
of allowed amounts. 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 has appealed to the Utah Supreme Court
which has poured
the case over to the Utah Court of Appeals. The
Utah Life and Health Insurance Guaranty
Association is also a defendant
in that case.
Affected Guaranty Associationss
(UT, ID, CA)
(NV, MT now closed) are reporting monthly 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 amounts distributed
are as follows:
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UT P&C |
UT L&H |
CA |
ID |
NV |
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Class 2 |
$94,165.46 |
$50,489.57 |
$108,235.22 |
$9,376.00 |
$2,849.56 |
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Class 3 |
$1,769,028.50 |
0 |
$2,000.00 |
$6,356.00 |
0 |
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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 excepting
one assumed reinsurance claim have been
determined. The value of that claim remains under
negotiation.
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 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 in the last
quarter 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. Discussions with the Utah Property and
Casualty Insurance Guaranty
Association (UPCIGA) regarding the ownership of
funds from the Employers Reinsurance Fund (ERF),
resulted in an
agreement that those funds should be distributed
to the estate, however, the fact that UPCIGA has
received 100 percent of
its class 2 and 3 claims resulted in an agreement
that there was no basis for the reinsurance funds
to be paid to UPCIGA.
Thus, the Liquidator has, with the agreement
UPCIGA, commuted with the ERF on several claims
and the funds have been
sent to the Liquidator. UPCIGA has reserved its
rights to future ERF distributions should
circumstances warrant.
Miscellaneous
WCIC engaged counsel to pursue subrogation claims
against insurance companies and individuals who
owed the company
reimbursement for payments made. Subrogation
collections are virtually complete. The Deputy
Liquidator has contacted all
outside counsel involved with open items and is
seeking a resolution of open subrogation claims by
December 31, 2007.
To the extent that amounts are deemed
uncollectible, the cases will be abandoned. Cases
assigned to in-house counsel have
been abandoned pursuant to counsel’s
recommendations.
Dated this ____ of February, 2008.
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 30, 2007, to the following claimants
or parties who have requested general notice
in this case, first class postage prepaid, this
____ day of February, 2008:
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
_____________________________
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