Oklahoma Prepares to Liquidate Pegasus Insurance Co.

A judge in the District Court of Oklahoma County in mid-August issued an order of liquidation with a finding of insolvency for workers’ compensation provider Pegasus Insurance Co. Inc.

Oklahoma Insurance Commissioner Kim Holland initiated proceedings to place Pegasus into rehabilitation earlier this year. The state’s insurance department subsequently found the insurer to be “insolvent and a hazard to policyholders, the creditors of Pegasus and the general public.” Pegasus did not contest the assertion.

The Oklahoma Office of Receivership, which is making preparations to liquidate the insurer, has posted the following statement on its Web site regarding the liquidation process:

• Premium deposits are subject to the priority of distribution of claims provision of the Oklahoma Statues.
• Insured’s will be required to file a proof of claim with the Receiver. The Proof of Claim form will be available on this website when the form is approved by the district court. Insured’s will need to include with their proof of claim documentation of payment of the deposit to Pegasus Insurance Company.
• Liabilities are fixed as of the liquidation date; August 12, 2010. Premium due on payroll prior to receivership will be offset against a premium deposit paid to Pegasus Insurance Company. Premium due on payroll on or after August 12, 2010 cannot be offset with the deposit.
• Failure to pay post liquidation premium when due, or failure to provide payroll information with which to compute premium, will result in cancellation of the policy.
• Collection will be pursued for all past due premium.