Policyholders with a covered claim against insolvent Reciprocal of America can expect a partial payment soon. The Virginia State Corporation Commission has authorized the deputy receiver of the liquidated reciprocal insurer to make a 17 percent distribution to policyholder-level claimants.
ROA primarily wrote hospital professional liability insurance, workers’ compensation insurance, and some ancillary insurance for its insureds.
ROA and its attorney-in-fact, The Reciprocal Group, were placed into receivership on January 29, 2003. On April 30, 2003, payment of all hospital liability claims was suspended by the deputy receiver. The SCC allowed the deputy receiver to continue paying certain workers’ compensation insurance claims upon which recipients typically rely for their livelihood and medical care.
The 17 percent payment is capped at $77.5 million, which Virginia Insurance Commissioner Alfred W. Gross said he believes is a conservative estimate of the assets that can be distributed now without unreasonable risk that later approved claims of equal priority will not receive the same percentage payment.
The bar date for the filing of claims was September 30, 2004. While the number of claims that might be filed has been fixed, the dollar value that ROA may have to pay on those claims is unknown.