Virginia’s State Corporation Commission (SCC) has set two hearings to consider matters regarding the proposed liquidation of Reciprocal of America (ROA) and The Reciprocal Group (TRG). Both companies were placed into receivership on Jan. 29.
On April 30, the deputy receiver of ROA and TRG petitioned the SCC to enter an order of liquidation. The 2002 annual statement filed with the SCC’s Bureau of Insurance shows that the Virginia-domiciled insurance reciprocal is insolvent by more than $200 million.
Hearing 1 – June 19
The first hearing will be held on Thursday, June 19. At this hearing, the Commission will consider the deputy receiver’s request for a finding of insolvency, decide if further efforts to rehabilitate the companies would be useless, and approve liquidation.
Under Virginia insurance law, such a finding by the Commission would trigger the steps for policyholder protection under various state guaranty funds. The purpose of such funds is to provide a safety fund, in limited amounts, for policyholders in each state, if ROA cannot pay any portion of a policy claim. ROA primarily wrote hospital professional liability and workers’ compensation insurance.
The SCC will webcast the audio portion of the hearing via the SCC website. Webcast participation instructions are available at: http://www.state.va.us/scc/caseinfo/webcast.htm.
Hearing 2 – Sept. 17
The second hearing will be held on Wednesday, Sept. 17. At this hearing, the Commission will consider all other matters raised in the deputy receiver’s application. Again, there are specific instructions in the order for participating in the hearing that also will be webcast.
For information regarding this case, various selected filings are available on the SCC Web site at: http://www.state.va.us/scc/caseinfo/boi/i030024.htm.
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