Golden State Mutual Policies To Be Transferred to IA American Life Insurance

February 26, 2010

To protect policyholders, Golden State Mutual Life Insurance Co. has entered into a letter of intent with IA American Life Insurance Co. to negotiate a reinsurance agreement to transfer all in-force insurance policies of Golden State Mutual, the California Department of Insurance reported.

Golden State Mutual, the largest minority-owned life insurance company in California, was placed into conservation on Sept. 30, 2009 when the company’s surplus dropped below the minimum required by the State of California. Golden State Mutual had recorded six consecutive years of net operating losses and was operating in a hazardous financial condition.

“State law requires that we protect policyholders by taking over an insurer when its finances weaken to a point where further deterioration may lead to claims not being paid,” said Commissioner Steve Poizner. “Unfortunately, despite years of warning by the Department of Insurance about its precarious financial state, we were forced take over Golden State Mutual last fall. We have now selected a bid for Golden State Mutual from a highly-rated insurance company that has the finances to pay claims and whose offer could greatly benefit the creditors of the company.”

The selection of IA American Life came as a result of a national solicitation process involving more than 40 active life insurers. All prospective bidders were subject to strict financial and operation disclosure requirements to ensure the successful transition of the business. Each bid was evaluated based upon a defined criteria that included the following considerations:

  • Whether the potential bidder seeks to acquire all of the insurance business.
  • Whether the potential bidder is currently licensed in the jurisdictions in which Golden State Mutual is licensed to conduct business.
  • Whether the potential bidder is willing to accept Golden State Mutual’s bonds, stocks and mortgage loans.
  • The size, financial strength and ratings of the potential bidder.
  • Whether the potential bidder would seek policy restructuring.
  • The potential bidder’s experience and infrastructure to administer the types of business to be assumed from Golden State Mutual.
  • Compliance with all financial and legal requirements associated with the RFP process as well as adequate pricing for the assets required to be transferred to the bidder.

IA American Life Insurance Co., rated “A-” by noted insurance rating firm A.M. Best, was the only bidder that satisfied all key components of the selection criteria. In addition, the pricing of the IA American Life Insurance Co. bid to assume 100 percent of the Golden State Mutual policies will ensure that policyholders will be fully protected under the transaction while remaining creditors and investors have a much greater potential to be repaid.

Source: CDI

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Latest Comments

  • April 10, 2014 at 1:19 am
    Chuvala Thomas says:
    All. Please be advised: This is not the forum to post names and policy numbers. That is private information that can lead to all kinds of scams. Contact the insurance commissi... read more
  • April 4, 2014 at 2:23 am
    Joan Kennedy says:
    My name is Joan Kennedy, and I have not received a bill for my insurance and the policy is so old I only pay $1.50, a month the policy for Golden State Mutual Life Insurance C... read more
  • March 5, 2014 at 2:33 pm
    Katherine says:
    How do I collect benefits on my deceased mother (Ms. Thompson)?
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