1988 0914 and 0915 - GOV (House) - Insurance Company Failures

  • 1988 0914 and 0915 - GOV (House) - Insurance Company Failures, John Dingell (D-MI)   ---   [BonkNote]
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    • House - Committee on Energy and Commerce - Subcommittee on Oversight and Investigations

We cannot play word games with policyholder money. (p74)

--  Karl L. Rubenstein, Special Deputy Insurance Commissioner, State of California

  • (p71) - If you want to do something to help the regulation of insurance and to help the policyholders, then cut through the case law and amend McCarran-Ferguson to precisely state that "the business of insurance" includes insolvency proceedings.

--  Karl L. Rubenstein, Special Deputy Insurance Commissioner, State of California

  • Statement to U. S. House of Representatives Subcommittee on Oversight and Investigations, By Karl L. Rubinstein, (Special Deputy Insurance Commissioner, State of California):, September 14, 1988
  • (p24) - ..insolvency of National Investor's Life Insurance Company and its affiliates.
    • This situation is better known as the Baldwin-United case, because the six insurance companies which were placed into liquidation in Arkansas and Indiana were part of the complex corporate empire of Baldwin-United Corporation which was itself placed into bankruptcy.
    • Baldwin-United involved life insurance; primarily single-premium deferred annuity products.
    • IV. Summary of Baldwin-United
    • My involvement with respect to National Investors Life Insurance Company ("NILIC") and its affiliates began in the summer of 1983, at which time I was retained by the Arkansas Insurance Commissioner with respect to the examination of the companies.
  • (p64) - A related mortgage insurance company, MGIC, had already been placed into delinquency proceedings in Wisconsin
  • (p64) - ...Baldwin (originally the piano company)...
  • [Business of Insurance - Liquidation of Insurance Company]
  • (p20) - Karl L. Rubenstein, Special Deputy Insurance Commissioner, State of California -  But the Court went on to say what it saw as the business of insurance is that which touches the fundamental relationship between the policyholder and the insurance company, which, of course, would be things such as the policy,
    • and there are many cases throughout the country that hold that the insurance regulatory statutes, specifically the insolvency statutes, are part of the insurer's - excuse me, yes, of the insured's insurance contract, and that is bound by them, and since these State insurance insolvency regulations will determine whether or not a dollar that is available to — that is in the estate of the insurance company will be paid to the policyholders or paid to somebody else is an issue of overriding importance to State regulators today.
  • (p71) - Several decisions have held that under McCarranFerguson, the state priority statutes should apply and that liquidation of insurance companies is "the business of insurance" within the meaning of McCarran-Ferguson. See, for example, ...
  • (p71) - In the 1987 case of Gordon v U.S. Dept. of Treasury,24 however, it was held that liquidation of an insurance company is not "the business of insurance."