This document is in PDF format. If you do not have software that reads
this document, you
may download a free reader from Adobe at
http://www.adobe.com. Please click the
button
below to take you to the
report, which you may download or print for your
records. If you
have
problems, please contact the webmaster.
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 WCMIC 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 of of of WCMIC as follows:
Brief History (This
item will continue to appear in these reports
for the convenience of the court.)
Wasatch Crest Mutual Insurance Company (WCM) [merged with or absorbed Electric Mutual
Benefit Association
(a VEBA trust), Energy
Mutual] wrote primarily workers compensation
insurance, first as a captive for Utah Power and
Light (NKA PacifiCorp), then, in 2003, for other
businesses. It also assumed insurance from
Educators Mutual Insurance
Company and assumed
reinsurance from an affiliate, First Continental
Life Insurance Company. Other lines included
appliance warranty (in run-off), travel accident
(terminated), accident and health (terminated)
and personal lines homeowners
and auto (in
run-off). 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 was a subsidiary of Wasatch Crest Group
(Group). Group sold WCIC to WCM on
January 1, 2003. Group also
owned First
Continental Life Insurance Company which was
sold and moved to Texas during the third quarter of
2004.
Administrative
Update
Remaining activity
relates to processing claims and collecting
reinsurance. The claim-filing bar date passed on
July 31, 2004.
Collection activity for unpaid premium is
complete. The last two employees, one full time
and one part time, have left the
company. Therefore, the company no longer has
any employees and relies on services provided by
consultants. Litigation
against a former affiliate has
ended in findings in favor of the defendant. As
a result, litigation activity and related
expenses
have ended.
Subrogation collections are virtually complete.
The Deputy Liquidator has contacted all 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 or sold.
Claims
The Deputy Liquidator has valued virtually all
claims filed in the estate. G.A.
claims remain undetermined
although only the Utah G.A. has
significant exposure on WCMIC policies. The
first Notices of Claim Determinations
were sent on January 27, 2004.
The Special Deputy sought and received court
approval to make a thirty percent distribution
of allowed class 3 claims which
was made during 2005. No further
distributions will be made until a distribution
is made to
WCMIC from its major reinsurer,
affiliate WCIC in Liquidation.
During the claim determination
process, the Liquidator denied one medical claim
that resulted in an objection by the claimant.
That objection was heard by a
Special Master approved by this court and, in that hearing, the claimant prevailed over
the Liquidator. That
claim is being administered by the Idaho Life
and Health Insurance Guaranty Association.
Rocky
Mountain Power opted out of the
Guaranty Fund and is handling all of the claims
attached to its policies.
Affected Guaranty Associations
(Utah, Oregon, Idaho)
are
reporting monthly and paying claims in the
ordinary course of business. G.A.
proof-of-claim forms are filed
as “contingent” due to the ongoing claim
activity. Claim development as reported
by some G.A.s have not yet been
fully evaluated due to the time it takes for
workers compensation claims
to develop. The Idaho Property
and Casualty Insurance G.A. has declined payment
because Idaho maintains
a deposit to pay Idaho
claimants.
Workers comp. business written since
April 2003:
This business covered by the G.A.s was being
administered by WCMIC on behalf of the G.A.s but
has been transitioned
to the G.A.s due to the
departure of the last of the WCMIC employees.
Appliance Warranty: Hassle Free and Triad
Warranty
Hassle Free
was a policy issued to PacifiCorp (“PC”) on WCM
paper and covers water heater
repairs for subscribers. This program has been
terminated by PC . All claims have
been determined
on this business and
approved by the Court.
Triad Warranty Program
claims have all been determined and approved
by the Court.
Other Claims
There
are also general creditor claims all of which
have been determined. As of the date of this
report, distributions to
creditors with a higher
priority than class 3 appear unlikely.
Other than the partial distribution to class 3 claimants, there have been no material changes in the financial position of
the company. However, since significant funds held by the company have been distributed to claimants, investment income
has been reduced.
Reinsurance
The
Special Deputy Liquidator has settled the
attempt to recover premium paid to a London
reinsurance broker just prior
to the liquidation date. The
Deputy Liquidator has agreed to accept 50% of
the amount that remained unpaid however
only expects to receive about
one half of the amount due from them because the
broker has now gone into liquidation.
The amount allowed in the
broker’s estate is approximately $265,000 on the
claim and approximately 75,000 British
pounds in interest and costs.
Since the claim has been agreed, the Liquidator
has received a partial payment from the London
receiver of $48,395.00
Relating to the claim that had been denied but
approved at a hearing by a Special Master, the
Liquidator has sent a claim for
the reinsurance the Liquidator
believes is owed on the claim. The reinsurer
(American National Insurance Company) has
denied payment. The Liquidator
has filed an arbitration demand as required by
the reinsurance contract. Other reinsurers
have been paying as billed.
Detailed analysis, or
additional information, regarding any estate
function is available to the Court upon the
Court’s
request. Ongoing issues affecting the WCMIC estate will be brought to the Court’s
attention on an as needed basis.