Other Rehabilitation Information

CHANGES MADE FOR REINSURED POLICIES FROM THE PROPOSED  REHABILITATION PLAN TO THE APPROVED PLAN

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SHIP reinsured and administered certain Transamerica Life Insurance Company (“Transamerica”), Primerica Life Insurance Company (“Primerica”), and American Health & Life Insurance Company (“American Health & Life”) long-term care insurance policies (the “reinsured policies”). The proposed Rehabilitation Plan filed in April 2020 contains language that indicates that the reinsured policies were going to be treated the same as policies issued by SHIP.  The Commissioner and SDR have since determined that the Amended Rehabilitation Plan should provide that the reinsured policies will be excluded from the provisions of the Plan dealing with SHIP’s policies. Fuzion Analytics, Inc., a subsidiary of SHIP, continues administering those policies under agreements with Transamerica, Primerica, and American Health & Life, which does not have a material effect on policyholders’ rights under the policies.

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The Court approved these changes through its approval of the Second Amended Plan. The final Approved Rehabilitation Plan reflects that decision by the Court. Key consequences of that change from the initial Proposed Plan include:

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1.    Transamerica, Primerica, and American Health & Life policies (the reinsured policies) will NOT be modified under the Plan and these policyholders will not be asked (or have the ability) to make elections under the Plan.
2.    SHIP will not be financially responsible for claims arising under these policies and will not have the right to treat these policy premiums as assets of SHIP.
3.    If SHIP is placed in liquidation, the terms of these policies will remain unchanged and these policyholders will not receive benefits from any life and health insurance guaranty association.  In that case, Transamerica, Primerica, and American Health & Life will remain fully responsible for these policies and any claims covered by these policies.
4.    It is possible that Transamerica, Primerica, and American Health & Life  will seek regulatory approval for future premium rate increases on these policies.
 

On October 21, 2020, the Commissioner, as statutory Rehabilitator of SHIP, filed a proposed Amended Rehabilitation Plan ("Amended Plan") and on May 3, 2021, a proposed Second Amended Rehabilitation Plan (the "Second Amended Plan") was filed. A hearing on the Second Amended Plan was held the week of May 17, 2021 in the Commonwealth Court of Pennsylvania. On August 25, 2021 the Court entered a Memorandum Opinion and Order approving the Second Amended Plan, and, on September 13, 2021, the Court entered a Memorandum Opinion and Order approving a Settlement Agreement related to the Second Amended Plan.

 

As requested by the Court, the Rehabilitator then filed her Approved Rehabilitation Plan (the "Approved Plan" or "Plan"). The final Approved Rehabilitation Plan was filed on September 30, 2021; redlines showing the differences between the Approved Rehabilitation Plan and the Second Amended Plan were filed on September 24, 2021 and September 30, 2021.

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Informal Comments may be submitted at any time following the procedures available on the Court Documents page of this Site in the June 12, 2020 Case Management Order for Comments and Hearing on the Proposed Plan of Rehabilitation. 

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The Formal Comment period ended on November 30, 2020. Consistent with the Case Management Order and subsequent scheduling orders available on the Court Documents page of this Site, the Court provided Formal Comment periods following the filing of the initial Proposed Plan, the Amended Plan, and the Second Amended Plan. 

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CLAIMS AGAINST SHIP IN REHABILITATION

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At this time, no special procedure has been implemented for the filing of claims against SHIP.  Those who believe they are owed money by SHIP should continue submitting invoices in the ordinary course of business.  It is possible that in the future more specific procedures and deadlines will be adopted governing objections to claims decisions by SHIP’s Rehabilitator.  If that happens, the Pennsylvania Rules of Appellate Procedure provide the following requirements for participation in such a process in the Commonwealth Court of Pennsylvania:

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Rule 3781(c)(4) Corporate representation

If the claimant is an entity other than a natural person, an attorney admitted to practice in Pennsylvania must enter an appearance for the claimant within sixty (60) days of the filing of the objection, or the Court may dismiss the objection.

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Rule 3781(c)(5) Pro hac vice admission

If a claimant wishes to be represented by an attorney not admitted to practice in Pennsylvania, that attorney must be admitted to practice pro hac vice, in accordance with Pa. R.C.P. No. 1012.1, Pa. B.A.R. 301, and 204 Pa. Code § 81.505, within sixty (60) days of the filing of the objection, or the Court may dismiss the objection.