Maryland Insurance Commissioner Al Redmer, Jr. has announced that more than 1,700 Marylanders have been affected by the Penn Treaty liquidation that occurred in Pennsylvania. However, the Maryland guaranty association system has assumed responsibility for Maryland policyholders’ claims, subject to statutory limits and conditions.
The Maryland Life and Health Insurance Guaranty Corporation will provide coverage for Maryland’s Penn Treaty and American Network policyholders, up to the allowed $300,000 cap. Policyholders are still responsible for paying premiums in full and on time. Failure to do so will result in a loss of benefits, including guaranty association coverage protection. Each policyholder has been sent a customized proposal of options from Penn Treaty.
The decision to liquidate the two insurance companies comes after multiple attempts to do so within recent years, due to the companies’ insolvency.
Penn Treaty is projected to have depleted its assets by 2018, while American Network is projected to have depleted its assets by 2023. The companies were previously in rehabilitation before a previous petition for liquidation was filed by the Pennsylvania Insurance Commissioner on October 2, 2009. Those liquidation petitions were denied, leaving the companies in business for seven more years before new liquidation petitions were approved.
Source: The Maryland Insurance Administration
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