Oklahoma Insurance Commissioner Kim Holland announced she has successfully petitioned the Oklahoma County District Court for an early distribution of funds to Oklahomans defrauded or owed money by now defunct AmCare Health Plans of Oklahoma Inc., a Health Management Organization (HMO).
Judge Noma Gurich ruled on the motion Feb. 23, 2006.
AmCare was manipulating its financial records by transferring assets back and forth between sister companies in Texas and Louisiana in an attempt to appear solvent. AmCare was placed into receivership by the Oklahoma Insurance Department in July of 2003. AmCare owes approximately $25 million to thousands of creditors in Oklahoma, records show. The early disbursement amount is $8,799,998.61.
“Our policyholders deserve the security of knowing their policies are going to pay when they have a claim,” Commissioner Kim Holland said. “I take very seriously my role in assuring the solvency of insurers doing business in this state. It is our primary responsibility and greatest consumer protection.”
The Oklahoma Insurance Department monitors the solvency of insurance companies doing business in the state of Oklahoma. Solvency is based on a company’s ability to pay for the benefits of the policies it issues. When a company fails to meet established solvency criteria, the insurance commissioner can place a company into receivership.
While in receivership a company falls under the control of the insurance commissioner as court appointed receiver. The insurance commissioner preserves its assets, and determines if the company can continue to conduct business in the state. Receivership is a process that is similar to bankruptcy, and the insurance commissioner’s role as receiver is similar to that of a trustee.
Creditors are paid from the assets of the company and from recoveries the insurance commissioner, as receiver, can make from third parties. Formerly, HMOs were regulated by the Oklahoma Health Department; due to a change in Oklahoma law, the insurance department took over their solvency regulation in 2003.
“We are taking every necessary step to prevent an insolvency by monitoring companies closely,” stated Holland. “But when a company does go insolvent, I will do whatever I can to recover funds owed to Oklahomans, and ensure that we can distribute these funds as quickly as possible.”
Normally, funds are not paid out until the receivership has been resolved completely by a court of law. However, following Insurance Commissioner Kim Holland’s request the court granted an immediate and partial disbursement of thirty-six percent of the funds owed to Oklahoma creditors. The remaining funds could be tied up in litigation for some time as the case is currently under appeal.
“I am pleased to announce that checks are being sent to Oklahomans right now,” added Holland.
The recovery of assets and the management of the AmCare receivership have been monitored and conducted in Oklahoma by Insurance Commissioner Kim Holland as receiver. The insurance commissioners of Texas and Louisiana have served as receivers in their respective states.
Those with questions regarding this settlement may contact the Oklahoma Insurance Department at (405) 947-0022.
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