The Missouri Department of Insurance (MDI) Director, Scott B. Lakin, announced that he is “closing the books on the Commonwealth General Insurance Co. receivership after paying claimants and creditors and returning almost $200,000 to its original owners.”
“This unusual surplus in an insurance company insolvency speaks to how quickly the department identified the firm’s original financial problems and the sound management of the receivership,” Lakin stated.
Commonwealth General and its subsidiary, Heart of America Fire and Casualty Co., insured long-haul truckers beginning in 1986 from the company’s headquarters in Kansas City. Commonwealth General reinsured 100 percent of all policies written by Heart of America.
By the end of 1992, neither company met the minimum capital and surplus requirements to do business in Missouri,” and were place in rehabilitation by order of a Jackson County Court Judge.The MDI bulletin explained that it sold off Heart of America in a competitive bidding process in 1994 and “recovered more than $1 million for its licenses in several states and other assets.”
“In 1995, the court ordered MDI to liquidate Commonwealth General. Guaranty funds in 18 states protected the interests of policyholders that filed more than 500 claims against Commonwealth General, but the insurer’s assets eventually yielded enough funds to pay off all claims,” said the announcement.
Jackson County Circuit Judge Peggy Stevens McGraw authorized Lakin, who has been the legal receiver since becoming director in March 2001, to close the receivership. During its operation of the companies the MDI managed to collect “$7.7 million – including $200,000 in earned premium from former agents – and paid off $11.8 million to policyholders, guaranty funds and general creditors,” the bulletin continued.
“In June this year, the receivership paid the remaining 27 shareholders of Commonwealth General $192,748. After final expenses are paid, it will turn over another $5,078,” the announcement concluded.”
Topics Missouri
Was this article valuable?
Here are more articles you may enjoy.
DeSantis Signs Bill Barring Local Worker Heat Protection Measures 
California Chiropractor Sentenced to 54 Years for $150M Workers’ Comp Scheme 
Florida Peninsula Says Reforms Have Had an Impact, Announces 2% Rate Cut 
JPMorgan Client Who Lost $50 Million Fortune Faces Court Setback 
