FEATURED ARTICLES1 President’s Message

By Francesca G. Bliss

3 Investment Portfolio AnalysisBy Alexander Chatfield Burns

4 The Successful Rehabilitationof Shenandoah Life InsuranceCompanyBy Arati Bhattacharya

6 The Perfect Receiver - Part 7 - RehabilitationBy Patrick Cantilo, CIR-ML

7 View from WashingtonBy Charlie Richardson

9 Board Talk: Bruce GilbertBy Michelle Avery

11 IAIR Atlanta August 2012Issues Forum Recap By Kathleen McCain

13 Forward-Looking Statementsand Insurance ReceivershipClaims TradingBy Patrick Hughes

16 Welcome IAIR’s NewestMembers!

18 The IAIR Bulletin Board

19 IAIR Launches New AffiliationWith ABA/TIPS

20 Join us in Savannah for the2013 Insolvency Workshop!

Association Manager:Bernd G. Heinze, Esq. International Association of Insurance Receivers 610 Freedom Business Center Suite 110King of Prussia, PA 19406 610.992.0015 | Fax: 610.992.0021E-mail: bernie@accolademgt.com

anxiously await the last phase of our process, the Annual Meeting onNovember 30th to receive the last votes, tally the totals and announce the winners.

Five Board positions are open and I am pleased to see such a depth ofknowledge and dedication represented by those running for the coveted spots.We have several incumbents (Michelle Avery, Joe DeVito, Alan Gamse), as wellas relatively new faces (Alex Burns, Fred Karlinsky) in our midst; there arethose that have served previously - behind the scenes and at the helm indedicated roles (Bart Boles, Kathleen McCain and Fran Semaya), and thosethat are long-time members, ready to take the plunge into Directorship (JoeDellaFera, Wayne Johnson, and Jim Schacht).

I thank all of our candidates for their willingness to run for office, realizing thetime, commitment and responsibility that it entails. Their professional andpersonal engagement will only further improve the Board and Association, as wellas enhance the benefits IAIR membership contributes to the unique segment of theindustry we serve. I look forward to working with whomever the membershipselects, knowing that each brings distinct qualifications to our organization. If youare a member in good standing and have not yet cast your vote, be sure to attendthe annual meeting to do so.

I would also like to thank Patrick Cantillo, Lowell Miller and Vivien Tyrell asthey step down from the Board for their contributions to us all over the past

(continued on page 2)

Fall/Winter 2012 Volume 21, Number 2

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years. We wish you every success in yourfuture endeavors.

Our External Relations committee chairs,Mary Cannon Veed and Doug Hertlein, havebeen hard at work building strategic allianceswith other great organizations who sharesimilar interests and industry expertise. Weare excited to announce the Memo ofUnderstanding between IAIR and the ABATort Trial and Insurance Practice Section hasbeen approved by both the TIPS Council andthe ABA Board of Governors (see page 19).Additionally, we are currently working tocomplete an MOU with the Association ofInsurance and Reinsurance Run-Off Com -panies (“AIRROC”). As we look to expand thereach of IAIR’s benefits and those of itsmembership to other professional organi -zations who share our mission and commit -ments to the industry, the relationship withTIPS and AIRROC will certainly provide usall with additional opportunities. Such jointventures will allow us to share news letterarticles from industry thought leaders, havelinks to one another’s websites, afford dis -counts on non-member registration fees, andto further cooperate, assist and promote eachother’s activities and projects.

As always, we have lots of great content foryou in this latest issue of The Receiver. Besure to check out our Bulletin Board on page18. We have highlighted a few notablecircumstances in which members haveswitched jobs, geographically relocated ortaken on new challenges. The message boardis a recent addition to the newsletter – one wewould like to use to keep you up to date onthe latest and greatest about our members, forour members. If you have news - professionalor otherwise - that you would like to share,please let us know and we will be happy toinclude it. The message board is only as goodas what you have to share, so SHARE!

Also make sure you check out the agenda forthe upcoming 2013 Insolvency Workshop(pages 20-21) taking place in the heart ofSavannah's historic district on January 29-31,2013. Thank you to Chris Maisel and DennisLaGory for their work thus far pullingtogether a wonderful agenda. The schedule

includes a great list of speakers as well as aninteractive segment that will be sure to keepyou engaged. Plan to arrive in time to attendthe kickoff cocktail party on the evening ofthe 29th.

As we look forward to 2013, don’t forget tokeep IAIR on your list of marketing andadvertising initiatives. Now is the time whenmany of you will be making a list andchecking it twice for next year’s budget. If youdecide IAIR has been more nice than naughty,consider a sponsorship through our corporatesponsorship program (see details of theprogram on page 22), place an ad in TheInsurance Receiver, or sponsor the InsolvencyWorkshop – there are plenty of options. If youare interested in hearing more or finding outhow, contact IAIR’s new Headquarters.

I’d like to thank Palomar, and Sheri Hiromsspecifically, for their willingness to step inand assist us tide over this past year and theirfacilitation of the transition to our new fullservice association management team, led byBernd G. Heinze, Esq. and Nancy L.Margolis, Esq. at Accolade Manage ment. Weare excited to welcome them as the newmanagers of IAIR’s operations. You’ll noticethe new contact information in the newsletterbut if you have any questions or reason to reach out, do so through Bernie atbernie@accolademgt.com and Nancy atnancy@accolademgt.com, or contact them at: 610-992-0015.

Thank you all for making the last year anexciting, dynamic and adventurous one whichallowed me to transition out of my role as aNew York receiver and focus my energy onIAIR – an organization filled with fantasticpeople with wonderful talent andproficiency in our little niche. Together,we can make our association even betterto meet ever evolving needs. Toparaphrase a sailor's quote, we can'tchange the direction of the wind,but we can adjust our sails to alwaysreach our destination.

Happy holidays to all!

frankie

President’s Message (continued)

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that every dollar in an insurance companyought to be weighted equally; there is ahistorical bias toward managing insuranceclaim related obligations over equivalentmanagement of potential gains and losses inthe investment portfolio.

An insurance company’s ability to pay itspolicyholder obligations over time is at risk tomany factors, such as the company’s liquidity,changes in interest rates and the acceleration ofrequired payments. The term structure ofliability maturities may lead one to misjudgethe company’s cash position as well as therelative value of its investment portfolio. A rise

in interest rates may greatlyincrease how much thecompany pays onits liabilities.Events mayoccur thatcause lia bilitiesto be comepayable atunexpectedtimes. Depend -ing on these andmany other fac -tors, an insol -vent carriermay greatlyunder estimatethe timing andmagnitude ofclaims forwhich they areliable.

In light of this, it is vital for receivers to adoptprudent asset liability management (“ALM”)for carriers that are under their supervision.The implementation of ALM strategies allowsfor an insurance company to accomplishnumerous objectives in maximizing availablefunds to support claims. The matching of assetsand liabilities in terms of return, maturity andduration can help receivers meet requiredreturn objectives for liabilities, protect againstchanges in interest rates that amplify potentialpayouts and manage its liquidity and assetmix. Managing ALM would help illuminate therelative strengths and weaknesses of aninsurance company’s investment portfolio andidentify marginal benefits and deficiencies ofexisting liabilities.

Not only can a successful ALM strategymanage and mitigate numerous risks inmeeting liabilities, but it can also substantiallyincrease a company’s operating results (thusminimizing the potential cost to guarantyfunds). In implementing an ALM strategy,receivers can understand how it can takeadvantage of numerous asset classes, such asfixed income securities, equities and moneymarket funds, to deliver the optimal return.

Investment Portfolio AnalysisBy Alexander Chatfield Burns

Alexander Chatfield Burns is theChief Strategist of Southport Lane, aNew York based private equity firmthat has controlling investments in anumber of insurance and rein -surance companies. Southport Lanealso provides asset managementservices to its portfolio companiesthrough its affiliate, Southport LaneAdvisors.

To submit an article, please contact Michelle Avery at mavery@verisconsulting.com.

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Shenandoah Life Insurance Company(“Shenandoah” or the “Company”), a oncetroubled mutual insurer, to emerge fromreceivership and resume normal businessoperations and the sale of new policies.

Although there have been successful “pre-packaged rehabilitations” in which apreviously negotiated deal was announced justshort of, or immediately upon, enteringreceivership, the nature and successfuloutcome of the Shenandoah receivershipshould be heralded as a landmark achievementfor the state-based regulatory system.

In Shenandoah’s case, there was no whiteknight waiting to rescue the Company as itentered receivership. Rather, receivershipconsultants embarked on a years-long effort ofidentifying and contacting potential strategicpartners, vetting proposed rehabilitationscenarios, and carefully selecting the bestsolution amidst various opportunities andinterested suitors for the distressed Company.The rehabilitation process successfullyculminated three years later with Shenandoah’sacquisition by United Prosperity Life InsuranceCompany (“United Prosperity”), whichprovided Shenandoah with a much neededcapital infusion. Also unique to the transaction— no state insurance guaranty funds weretriggered or asked to make payments on behalfof Shenandoah’s policyholders, although therewas a finding of insolvency by the Commissionwhen the rehabilitation plan was approved.

Shenandoah’s seeming demise and saving grace

Shenandoah1was ordered into state-mandated

receivership on Feb. 12, 2009, only monthsafter the beginning of the most serious

national and worldwide financial crisis sincethe Great Depression. The Company sufferedsignificant investment losses prior toreceivership, resulting in the finding thatfurther transaction of Shenandoah’s businesswould be hazardous to policyholders,creditors, members and the public. Also, theCompany had just been advised by anexpected purchaser that its anticipated pre-receivership acquisition deal would not beconsummated. In that bleak context, and withthe onset of receivership, the late Alfred W.Gross, Commissioner of Insurance in theCommonwealth of Virginia, was appointedDeputy Receiver of the Company, to besubsequently succeeded by Jacqueline K.Cunningham. The Deputy Receiver movedquickly to retain a team of expert receivershipconsultants (the “receivership team”) led byCounsel to the Deputy Receiver.

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The receivership team began workingimmediately to stabilize the Company andevaluate its vulnerabilities and rehabilitationoptions in an effort to preserve, if at all possible,the interests of policyholders and creditors. Tothat end, among the first priorities wereretaining key Company personnel to continueday-to-day servicing for policyholders, toinclude continued payment of claims, andstabilizing the Company’s financial condition.With the latter objective at the forefront, theDeputy Receiver implemented numerousmeasures to reduce expenses and unnecessaryliabilities, preserve income from renewalpremiums, and control cash flow, all whilestriving to get a better read on the Company’strue financial condition and prognosis.Moratoria on the issuance of new business andcash withdrawals were also declared.

The Successful Rehabilitation of Shenandoah Life Insurance Company

RECEIVERSHIP NEED NOT END IN RUN-OFF OR LIQUIDATIONBy Arati Bhattacharya

This article first appeared in LifeHealthPro.com on October 25, 2012 and is reprinted with their kind permission.

Within a few short weeks of being in receivership,the Deputy Receiver and the receivership teamdetermined: (1) Shenandoah’s financial condition,good will, and other attributes made it apromising candidate for rehabilitation; (2)Shenandoah’s rehabilitation would be in the bestinterests of policyholders and creditors; and (3)rehabilitation would most likely be achievedthrough an outside investment, an acquisition, ora merger. Once a rehabilitative course of actionwas selected, Counsel to the Deputy Receiverlaunched efforts to identify potential third-partystrategic partners or purchasers.

Remedial measures implemented while inreceivership materially contributed towardmaking the Company a more attractiveacquisition target. Attentive and enlightenedmanagement of invested assets during thereceivership period enabled the Company notonly to capitalize on the recovery in the capitalmarkets, but also to substantially improve boththe quality of the invested assets and theCompany’s ability to withstand lateraftershocks to the broader economy, such as theglobal impact of the debt crisis in the Eurozone. During the receivership, the portfolio ofinvested assets gained more than $300 millionin market value while improving credit qualityand preserving acceptable yield and duration.

In due course, United Prosperity emerged as themost promising suitor for a proposed demu-tualization, acquisition, and rehabilitation of Shen-andoah. After a period of intense reciprocal duediligence and document drafting, United Pros-perity and the Deputy Receiver executed a StockPurchase Agreement on May 4, 2011.

3Counsel to

the Deputy Receiver subsequently shepherded theprocess of addressing potential objections,devising solutions to move past conditional andregulatory hurdles, and seeking all necessaryapprovals for the proposed transaction including,after a hearing: (1) the Commission’s approval ofthe Company’s proposed conversion, rehab-ilitation plan, and acquisition of control; and (2) thepolicyholders’ vote in favor of the Company’sconversion to a stock company. The rehabilitationplan was approved by the Commission and amore than 97% favorable vote of policyholders,and received no formal opposition from regulatorsor other interested parties.

The next chapter for Shenandoah

Having satisfied all conditions precedent to theStock Purchase Agreement and with the receipt ofall requisite approvals, the Deputy Receiver liftedthe moratoria, and on May 8, 2012, theCommission entered its order terminatingreceivership proceedings, bringing a positivefinality to the transaction. Today Shenandoah is aVirginia stock life insurance company and wholly-owned subsidiary of United Prosperity. Back fromthe precipice of liquidation, a revitalizedShenandoah is now immersed in the business ofinsurance, on its way to reclaiming its historicalrole as an efficient competitor in its markets. Therecapitalized Company remains fully obligatedunder its insurance policies and contracts,continues to fully pay approved policyholderclaims, employs top-quality personnel, and willshortly resume offering the type of premierinsurance products for which it had been knownfor almost a century prior to receivership.

Shenandoah’s successful rehabilitation is atriumphant victory story for the state-basedregulatory system and rebuts the conventionalwisdom that liquidation or run-off are the onlypracticable conclusions for a financially impairedinsurance company. Shenandoah’s favorableoutcome can be attributed, in part, to the DeputyReceiver’s immediate responsiveness to a falteringfinancial situation, the engagement of an exper-ienced team of consultants, a carefully sought andvetted rehabilitation opportunity, anticipatorydeliberation of potential obstacles and creativesolutions to complex issues, and a steadfast anddetermined collaboration among the DeputyReceiver, the receivership team, regulators, UnitedProsperity, employees, policyholders, and creditors.1 Shenandoah is based in Roanoke, Virginia, and is licensed in thirty states and the

District of Columbia. Prior to being placed in receivership, the Company had assetsexceeding $1.6 billion and annual premiums of approximately $284 million.

2 Counsel to the Deputy Receiver in the rehabilitation and acquisition of Shenandoahwas Cantilo & Bennett, L.L.P. (“Cantilo & Bennett”), an Austin, Texas “boutique” lawfirm whose practice focuses on insurance rehabilitations and liquidations.

3 Per the terms of the executed Stock Purchase Agreement, the Company wouldconvert its structure from a mutual insurance company to a stock company andconvey 100% of the resulting stock to United Prosperity. As consideration, UnitedProsperity would provide a sufficient capital infusion amount for the Company toattain a requisite risk-based capital level.

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The Successful Rehabilitation of Shenandoah Life... (continued)

Arati Bhattacharya is a partner atCANTILO & BENNETT, L.L.P.Her practice is concentrated in theareas of insurance rehabilitationand liquidation.

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this question one must first define the goal.What is rehabilitation? There are as manyanswers to this question as there are“rehabilitation experts” responding. Moreimportantly, the answer is typically drivenby where one sits, being materially differentfor a shareholder than it might be to areinsurer or policyholder. For the chicken justcrossing the road without being hit issuccess. For the fox success is eating the chickenafter both have crossed. Full claims payments,preservation of coverage, maintaining employ -ment, sale of new business, and surplus generationare all important goals that play a role in definingthe success of a rehabilitation. Defining the result ofa plan as “rehabilitation”, therefore, does not somuch turn on reaching a universally acceptedcondition as it does on improving materially the lotof affected constituencies beyond what might havebeen expected in a liquidation.

In a meaningful sense, rehabilitation is actually aspectrum of possible outcomes, the point withinthat range at which one can reasonably aim beinggoverned by the starting point. In the very best ofcases, rehabilitation will consist of the insurerremaining intact (perhaps only ownership havingchanged) and resuming the sale of new businesswith reasonable assurances that all contractualobligations will be met timely. Most of us are morelikely to see a navy comprised of horses andbayonets than actually be part of a true rehab -ilitation in this sense. Perhaps at the other end ofthis spectrum is a plan that results in policyholdersbeing paid in full, albeit with guaranty fundcontributions. Between these extremes are plansthat pay policyholders fully without guaranty fundcontributions, those that call for sale of part of thecompany into the market while the rest is liquid -ated, arrangements that reduce policy bene fitsthrough restructured contracts and pay those in full,and myriad other variations on these themes.

There are few firm rules governing rehabilitation,

although one principle receives almostuniversal recognition: creditors should fareno worse under a rehabilitation plan thanthey would have in a liquidation.1 Beyondthat, the limitations will consist of the scantguid ance provided by applicable statutes,what the receivership court will author ize,and what political and admini strativeconsiderations will allow. With the aud acity

one normally finds only among saloon gamblers atSunday Meeting, I dare to offer a few additionalsuggested principles. A rehabilitation plan should:

1. Have as its paramount goal maximizingpolicyholder benefits;

2. Provide for fair and equitable treatment of allcreditors similarly situated;

3. Provide for payment to lower priority(therefore unsecured) creditors only ifpolicyholders will be paid in full;

4. NOT depend on the realization of results thatare highly improbable;

5. Be fully exposed to all affected constituencies,with reasonable opportunity for meaningfulinput;

6. Not rely or depend upon the ignorance of anyaffected constituency;

7. Be attainable with the resources reasonablyavailable to the receiver;

8. Depend as little as possible on changes inapplicable law;

9. Make reasonable provision for adversedevelopments; and

10. Be premised on a time line that is reasonableunder the circumstances.

While rehabilitation is not the product of amagic formula, these humble suggestions canfacilitate the creation of a plan that has areasonable chance of suc cess. So back to thequestion with which we opened - “Silly!!Puppies can’t be rehabilitated! Now go get morenewspaper and keep him away from that darned fox!”1 Space limitations prevent legal citation, but contact the author if curiosity is killing you.

The Perfect Receiver - Part 7 - RehabilitationBy Patrick Cantilo, CIR-ML

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international arena. Witnesses included DirectorMcRaith and members of the industry.

The panel of witnesses spoke in a unified voiceof support for the Federal Insurance Office(“FIO”) in the context of internationalregulation. While the hearing was held beforethe release of the draft of ComFrame in July2012, many of the panelists noted that the FIO isvaluable and helpful in international arenas,including the International Association ofInsurance Supervisors (“IAIS”). As a singlevoice, the FIO would be able to give voice to theUnited States’ interests and perspectives ininternational forums, a panelist said. This wouldassist with the development of coherentinternational regulations.

Solvency II was also mentioned briefly. DirectorMcRaith congratulated the European Union onthe development of the standard.

Federal Insurance Office (“FIO”) Reinsurance Report

FIO issued a request for comments for a Dodd-Frank mandated report on the U.S. and globalreinsurance market on June 27, 2012. The noticeasked for views on domestic and internationalregulation of reinsurance and the role it plays insupporting United States reinsurance. Commentswere due August 27, 2012, and we are awaitingthat report. This topic dovetails with the May 2012Congressional hearing as well, as reinsurance wasalso discussed at that hearing. Panelists at thathearing noted that the United States is a netimporter in the reinsurance market.

FSOC SIFI Designations

In late September, the Financial StabilityOversight Council (“FSOC”) moved into thethird and final phase of designating nonbankfinancial companies that will be considered

systemically important financial institutionsand subject to heightened Fed oversight. Eventhough FSOC does not intend publicly toannounce the name of any institution underconsideration until the final designation, AIGhas voluntarily announced that it is one of thecompanies that has progressed to the final stage.Analysts expect that the list of nonbankcompanies under consideration contains nomore than seven institutions, with GE Capitaland at least a couple of life insurers being someof the likely suspects in addition to AIG.

An institution that is designated as a systemicallyimportant financial institution (“SIFI”) will besubject to Federal Reserve supervision that willinclude stress tests, higher capital levels andtougher liquidity standards. Some commentatorssay that as a result of these stricter standards,smaller insurers will have an advantage over theSIFI insurers.

Once a firm is notified that it is underconsideration in the third phase, it has 30 daysto challenge the designation. FSOC must thenhold a non-public hearing within 30 days, withanother 60 days after the hearing to make thefinal designation. The final designations areexpected to be complete in December or the firstquarter of 2013.

Insurance companies continue to make the casethat regulators should oversee insurers dif -ferently than banks.

US–EU Dialogue

The US-EU Dialogue Project (“The Project”) hasreleased a draft report

1for public comment

comparing the insurance regulatory regimes ofthe two jurisdictions. The Project, led by aSteering Committee, is designed to enhanceunderstanding of the key features of eachregulatory regime and to identify important

View from WashingtonBy Charlie Richardson

Congressional Hearing on Insurance Industry Competitiveness

characteristics. Its creation was a response toprevious tension between the US and EU overperceived EU efforts to pressure the US intoaccepting Solvency II.

The key contributors to The Project on the US sideare FIO, the NAIC and various state insuranceregulators, while the European Commission andthe European Insurance and OccupationalPensions Authority represent European interests.

The draft report, released late in September,highlights key commonalities among thesystems, most notably that both regimes sharethe overarching objectives of protectingpolicyholders and enhancing financial stability.Similarly, both regimes fared extremely wellduring the recent financial crisis.

Nevertheless, there are significant differencesbetween the regimes as well.

• Differences in umbrella organizations: In the EU,the European Insurance and OccupationalPensions Authority (“EIOPA”) has regulatoryauthority in its own right, whereas the NAIC isnot itself a supervisory authority.

• Solvency regulation: In the US, solvencymonitoring is based on the Risk Based Capitalformula, whereas the EU employs an explicitGroup Solvency Capital Requirement.

• Scope of supervision: Group supervision inthe EU is over the entire group, including allentities in the group on a global basis. In theUS, group supervision has traditionallyfocused on the holding company and theinsurance subsidiaries only.

Interested parties were to submit writtencomments on the draft report by October 28.There were public hearings in Washington, DCand Brussels on October 12 and 16 respectively.

IAIS Conference

The IAIS held its annual conference in WashingtonDC in October, drawing regulators and interestedparties from across the globe. While it is clear thatEU and US regulators have made substantialprogress on how to coordinate supervision ofinternationally active insurance groups, theyremain far apart on the need for group widecapital requirements and the proper role of agroup regulator. The conference concluded with apublic hearing on the draft paper published by theUS-EU Dialogue Project designed to tackle suchcoordination issues. See story above.1 http://www.naic.org/documents/committees_g_us_eu_dialogueproject

_draft_1209.pdf

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View from Washington (continued)

Charlie Richardson is a Partner at thelaw firm Faegre Baker Daniels in itsWashington, D.C. office where hechairs the firm’s Insurance practicegroup. Charlie assists insurancecompanies and others with all types ofcorporate, federal legislative,regulatory, public policy andcompliance matters. He practices inthe area of insurance companyrehabilitations, liquidations andtroubled company workouts.

The Insurance Receiver is intended to provide readers with information on and provide a forum foropinions and discussions of insurance insolvency topics. The views expressed by the authors in theInsurance Receiver are their own and not necessarily those of the IAIR Board, Newsletter Committee orIAIR’s Association Manager. No article or other feature should be considered as legal advice.

Newsletter Committee:Michelle Avery, CPA, Chair Evan Bennett, Arati Bhattacharya, Francesca G. Bliss, Richard J. Fidei, Douglas Hartz, Esq., CIR-ML,Harold Horwich, CIR-ML, James Kennedy, Esq., Dennis LaGory, Esq.Officers: Francesca G. Bliss, President, Patrick Hughes, Esq., 1st Vice President, Bruce Gilbert, 2nd Vice President,Donna Wilson, CIR-ML, Treasurer, Alan Gamse, Esq., Secretary, Patrick Cantilo, Esq., CIR-ML, ImmediatePast President Directors:Michelle J. Avery, Evan Bennett, Betty Cordial, CIR-ML, Richard Darling, CIR-ML, Joseph DeVito, AIR,James Kennedy, Esq., Dennis LaGory, Esq., Lowell E. Miller, Douglas Hartz, Esq., CIR-ML, Vivian Tyrell, Esq.Legal Counsel:William Latza, Esq. and Martin Minkowitz, Esq., Stroock & Stroock & Lavan LLP

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ago. As comparedto many of thefaces aroundIAIR, Bruce is arelativenewcomer to theorganization –having been amember for onlyabout 5 yearsnow duringwhich time he hasserved on theEducation

Committee. He was a regular at the NAICmeeting events when a colleague within theinsolvency community invited him to attendthe IAIR events. Bruce is certainly no strangerto insurance - he has worked as the ExecutiveDirector for the Nevada Insurance GuarantyAssociation for almost 8 years – a drop in thebucket compared to his over 30 yearsworking in the industry.

Bruce’s initial career aspirations had himgoing to law school after college, but afterparticipating in an exchange program thattook him to Japan he decided his heart wasn’tin it. Although he can’t remember who it wasexactly, someone suggested he considerpursuing insurance adjusting andinvestigation. Bruce appeased the urging andinterviewed with Aetna Property andCasualty as a multi-lines claims adjuster.Although he may have had his doubts, onceAetna offered him a car as part of hisemployment, he never looked back. As hedescribed it, “as a young man, without a care,a car was very enticing…”. So much so thathe conceded he would have worked for free.I couldn’t let that one go. What kind of carwas his? He became very nostalgic and

without skipping a beat, a small grinappeared, “a 1977 Chevy Nova with wheelsthe same color as the car – Texas orange.”What a beauty.

Bruce’s career with Aetna took him toPortland, Oregon and then to San Francisco.After Aetna, Bruce wound up at The DoctorsCompany and then at California Casualtywhere he was part of a management team,causing him to transfer to Las Vegas. He hasenjoyed his time in Nevada and ultimatelylanded at his current role as the ExecutiveDirector of the Guaranty Association… agreat segue to my Q&A with Bruce.

Q: What is the biggest accomplishment ofyour professional career?

A: Bruce is most proud of his currentposition as the Executive Director withthe Nevada Guaranty Association. Heviews it as the “best career move…thebest decision” saying that after years inthe industry it is the happiest he’s everbeen. He finds it to be the most rewardingexperience with visibility andinvolvement exceeding any othercircumstance where he’s been in aposition to lead and influence.

Board Talk: Bruce GilbertBy Michelle Avery

Bruce Gilbert

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Q: What is the most important issue yousee facing IAIR during your term on theBoard?

A: Without a doubt Bruce believesmembership services are the biggest issueIAIR needs to deal with. Bruce states, “We not only have a really tough task ofgrowing the membership which isdifficult in and of itself, but more difficultis providing benefits to the group throughvalue to the membership.” Brucebelieves, if you build it, they will come…“As you provide the value that membersexpect, people are going to want to jumpin.” In that vein, Bruce believes memberretention and member services go handand hand.

Q: If you’d like, please tell us about yourpersonal life. Where were you born?Where do you live? Are you married? Doyou have any children?

A: Bruce is originally from Colorado untilhis college education took him to Oregonand ultimately Bruce landed in Nevada.He is married with two kids, a daughterwho teaches middle school in Columbus,Ohio and a son who works as arehabilitation technician for a brain clinicin Nevada. Many of you will likely find itas hard to believe as I did that Bruce is agrandfather – Noah Aaron Williams isalmost 1.5 years old.

Q: What is a recent fictional book youwould recommend to others?

A: Bruce recommended Garth Stein’s TheArt of Racing in the Rain, a story thatevery dog lover should read – funny,heartwarming, sad and uplifting all in one.

Q: What is your favorite sport? Team?

A: Bruce enjoys playing tennis com -petitively, a sport he also claims as hisfavorite leisure activity. Bruce has a loveof baseball as well and plays on severalsoftball teams too. He roots for the

Oakland A’s and no doubt was leftdisappointed by the end of their recentseason in the AL division series despitetheir resilience.

Q: What is your favorite NAIC/IAIRconference location?

A: Hands down, San Diego – “it’s fabulous.”Enough said. Too bad, America’s FinestCity doesn’t appear on the NAIC list ofupcoming meeting sites. Based on thecurrent agenda, we will have to wait atleast 3-more years for an excuse to goback.

Q: Give us one piece of information thatmost people don’t know about you?

A: Bruce is “Taxi cab and Sushi Bar” fluent inJapanese – who knew? Not exactly a skillthat comes in handy around NAIC.During his college exchange program inJapan his interest was piqued and hepursued his interest by studying thelanguage and later becoming thepresident of the Japan-America Society ofNevada.

Bruce, thank you for visiting with me andsharing your background with IAIR.

Board Talk: Bruce Gilbert (continued)

Michelle Avery, CPA is anExecutive Vice President andManaging Director at VerisConsulting, Inc. within the firm’sforensic accounting practice.Michelle has extensive experienceassisting clients in causation anddamage assessments related tofailed property/casualty and lifeand health insurance companies.Michelle is a Board member ofIAIR and a member of theAICPA’s NAIC/AICPA WorkingGroup Task Force. Michelle can be reached atmavery@verisconsulting.com.

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He shared insights about thecurrent state of the insuranceindustry in Georgia and how theGeorgia Department’s financialsurveillance is focused on keepingcompanies out of liquidation. It wasa perfect lead in to the paneldiscussion focused on Georgia’stroubled companies.

Georgia Troubled Company Panel

The first panel discussed issuesaffecting troubled companies andreceiver ships in Georgia. The panelincluded F. Laurence Lindbergh, ChiefFinancial Examiner at the Georgia Departmentof Insurance, Michael Marchman, ExecutiveDirector of the Georgia Guaranty Associationsand Bryan Fuller and Robert Kasinow ofExamination Resources. The panel startedwith a discussion of administrative super -vision and described how the procedures usedby the Georgia Department are tailored to thespecific situations. One of the measuresrecently implemented by the GeorgiaDepartment is the use of Georgia GuarantyFund staff to handle claims and otheradministrative tasks at the company.

The panel then addressed internationaldevelopments and their impact on the UnitedStates state-based regulation. The paneldescribed the role of the InternationalAssociation of Insurance Supervisors (IAIS)Insurance Core Principles and then moved to adiscussion of the IAIS’ global initiative underwayto identify “too-big-to-fail” insurers for inclusionon the list of Globally Systemic ImportantInsurers, or what they are referring to as G-SIIs.No doubt there is more to come on this topic ofdiscussion.

NAIC “M” Records and MedicareAdvantage Plans

Mark Steckbeck, Assistant Vice Presidentof Legal Affairs at the NationalConference of Insurance GuarantyFunds, addressed a couple ofreporting issues involvingMedicare currently beingdiscussed at IAIR’s GuarantyFund Liaison Committee. Thefirst issue he discussed washow liquidators and guaranty

funds are dealing with themandatory reporting require -

ments related to Medicare beneficiaries whoreceive settlements, judgments, awards or otherpayments from insurers. Mr. Steckbeck describedthe coor dination efforts between receivers andthe guaranty funds vis-a-vis reportingcompliance and then moved to a discussionand explanation of Medicare Advantage Plansand how issues related to these plans are beingaddressed. This discussion served as a greatteaser to issues the liquidators and guarantyfunds deal with on a regular basis duringIAIR’s Guaranty Fund Liaison Committeemeeting. If you are interested in participatingin the conversation, be sure to check theschedule for the next committee meeting.

State Legislatures and Insurance Regulation

Roger Schmelzer, President and CEO of theNational Conference of Insurance GuarantyFunds, and Susan Nolan, Executive Director ofthe National Conference of Insurance Legislators(“NCOIL”), provided an overview of the work ofNCOIL, an organization comprised of statelegislators focusing on public policy issues ininsurance regulation. As they discussed, NCOIL’spurpose is to educate state legislators on

IAIR Atlanta August 2012 Issues Forum Recap By Kathleen McCain

12

IAIR Atlanta August 2012 Issues Forum Recap (continued)

Arnstein & Lehr, LLCComputershareDeVito Consulting, Inc.FitzGibbons & Company, Inc.Insurance Regulatory Consulting GroupLaw Office of Daniel L. WatkinsLowell Miller Accountant, Inc.

Quantum Consulting, Inc.Robinson Curley & Clayton, P.C.Scribner, Hall & Thompson, LLP Semmes, Bowen & Semmes, P.C.Strategic Initiatives Management Group, LLCVeris Consulting, Inc.Zolfo Cooper (Cayman) Limited

A SPECIAL THANKS TO OUR 2012 CORPORATE SPONSORS FOR THEIR CONTINUED PARTICIPATION AND SUPPORT!

For sponsorship opportunities, please contact: Bernd G. Heinze, Esq. • 610.992.0015 • bernie@accolademgt.com

insurance issues by providing a national forum forlegislators and interested parties to share views, byeducating legislators through hearings, workshopsand the like and by providing legislators withresearch and monitoring of insurance issues. Thediscussion also included some of the current issueson NCOIL’s agenda. This was a great opportunityfor the IAIR membership to familiarize themselveswith the workings and leadership of thisorganization.

AIRROC Dispute Resolution Procedure

Trish Getty, recently retired as the CEO andExecutive Director of the Association of Insurance& Reinsurance Run-Off Companies (“AIRROC”),spoke about AIRROC’s Dispute ResolutionProcedure. As Ms. Getty explained, the AIRROCprocess is designed to reduce arbitration costs andto make the procedures straightforward and costeffective. AIRROC’s process is open to membersand non-members with non-members paying aservice fee for its use. Once there is an agreementamong the parties, the procedure provides for asingle neutral arbitrator at a discounted hourlyrate. The format is a bit non-traditional:organizational meetings are by telephone; thedispute is submitted to the arbitrator by briefs anddocuments only (no live testimony unless agreedby the parties); oral argument is only at thediscretion of the arbitrator; and discovery is onlyallowed if the parties agree. The arbitrator isrequired to issue a decision within 30 days of

completion of the arbitration. Ms. Getty closed bystressing the cost effectiveness and simplicity ofthe procedures.

NAIC News and Updates

Jim Mumford, First Deputy Commissionerwith the Iowa Division, ended the program byproviding updates and highlights of NAICcommittee meetings. Mr. Mumford has a frontrow seat to the action as the Chair of the NAICReceivership and Insolvency Task Force – atask force that the IAIR membership keeps aclose eye on. This discussion was a great“nutshell” update for those needing the cliffnotes version of the goings on inside the NAIC.

Thanks to all the participants who agreed tospeak at the Issues Forum and share theirwealth of knowledge with the organization.Thank you also to those who helped meorganize the Forum. I look forward to seeingyou all again in DC and hope you will be ableto participate in person. My write up is ameager substitute for first hand participation –don’t miss it. We are currently scheduled tohost the Issues Forum on November 29 from2:30 to 5:30 (Chesapeake 4-5-6). Check the mostup to date schedule however to confirm thetime and location. See you there!

Kathleen McCain can be reached at (213) 509-7636 orkmmccain@earthlink.net.

Among potential regulatory concernsassociated with claims trading is an arguableinformation asymmetry between buyers andsellers. The buyers might know more aboutthe estate, and have greater analytical skillsand experience to assess the implications ofthose facts. During my tenure as specialdeputy, this concern led Illinois’ Office of theSpecial Deputy Receiver (“OSD”) to develop apolicy for, in specifically defined cir -cumstances, the publication of forward-looking “Good Faith Estimates” or “GFEs,”indicating anticipated estate activity. Thisarticle describes the OSD’s use of GFEs, anddiscusses both the potential creditor benefitfrom a GFE’s publication and the potential

downsides to their use. The goal being toframe this issue as the receivershipcommunity continues to consider it.

Background on Good Faith Estimates

A Good Faith Estimate is a tool designed toprovide the creditor with additionalinformation needed for more informeddecisions and financial planning as regardsthe creditor’s claim. A GFE is a web-published, forward-looking estimate of futureactivity of an estate, generally relating totiming and percentage of distribution. TheGFE is only an estimate and is based on theinformation available at the time it was made;circumstances on which it is based are alwayssubject to change. The receiver can often

provide more preciseforward-

looking

13

Forward-Looking Statements and Insurance Receivership Claims TradingBy Patrick Hughes

information that can further inform thecreditor and that cannot be found ondocuments such as Financial Statements or theNAIC’s GRID system. And to the extent theGFE could be deducted from financialstatements, the GFE may cure asymmetriescaused by a buyer-seller sophistication gap.

Here are two examples of publicly publishedGFEs. The first is a very straight forwardstatement about an anticipated distribution:

Based upon our best estimates and barring anyunforeseen circumstances, the Special DeputyReceiver anticipates making a 100% distributionon claims allowed at policyholder priority level(d) and a substantial dividend distribution onclaims allowed at general creditor level (g) of theIllinois statutory distribution scheme. It isanticipated that the distributions will be madebefore the end of the second quarter of 2010. Assoon as deemed appropriate, further informationregarding the distributions will be posted on ourwebsite. These good faith estimates are basedupon information available and the cir -cumstances known at the time that they weremade. Before relying on these estimates inmaking any decisions, be aware that underlyingfacts and circumstances upon which they arebased are subject to change.

The second example is, because of the estate’scircumstances, a somewhat more complexstatement:

Based upon our best estimates and barring anyunforeseen circumstances, the Special DeputyReceiver expects that a second dividend of 25%will be distributed in the fourth quarter of 2011on timely filed claims allowed at the policyholderpriority level (d) of the Illinois statutorydistribution scheme. This action would bring thetotal distribution at priority level (d) to 100%, asa 75% distribution at priority level (d) waspreviously made in 2010. This Good FaithEstimate is based upon information available andthe circumstances known at the time that it wasmade. Before relying on this estimate in makingany decisions, be aware that the underlying factsand circumstances upon which it is based aresubject to change.2

Two characteristics of effective GFEs are worthnoting: First, the GFE should not be designed

to create specific outcomes – to encourage ordiscourage trades, for example. The theorygoes that information is good, includinginformation regarding the receiver’s intent.That information creditors may use forthemselves, making decisions they regard asin their best interests.

Second, the GFEs should be measured toensure a solid track record for accuracy. Andwhen GFEs need revision based on newdevelopments, a receiver employing that toolshould do so. If the GFEs lack credibility, theirutility declines and they arguably createunintended distortions in the market that arethe opposite of the GFEs’ intent.

Controls and Oversight

A GFE should be carefully considered. As anexample, there are a series of steps that the OSDtook to ensure that a GFE is ready for publication.Before a GFE is issued on an estate, the SpecialDeputy Receiver gave the final approval topublish the GFE after the OSD SeniorManagement met and discussed the proposedGFE. The OSD utilized a formal checklist toensure that all necessary considerations areanalyzed before pub lication of a GFE.

The checklist requires that before publication, theSpecial Deputy Receiver must determine that:

1.The Good Faith Estimate (“GFE”) isreasonably certain to prove accurate.

2.The components underlying the calcu lationof the estimate are reliable and verifiable.

3.Events outside the Special Deputy’s controlhave been given careful consideration in thedevelopment of the GFE. Such events mayinclude the federal claim release, potentialtax liability, pending litigation orsettlements.

4.The creditor benefit from publishing theestimate outweighs any potentialconsequences from the GFE provinginaccurate or needing revision.

5.The GFE does not reveal confidential strategyor intentions that would harm the marshallingof assets or management of the estate.

6.There is no legal restriction on publishingthe GFE. The publication is not inconsistent

14

Forward-Looking Statements... (continued)

with Chancery Court orders or any state orfederal law.

7.The GFE is understandable by the generalpublic.

8.The GFE will achieve its intended effect ofproviding information to consumers, whichis valuable for financial planning, leading tomore informed consumer decisions.

The Potential Benefit

Although there were preliminary observationsthat posting GFEs had an influence on claimstrading in the insurance market, there has beenno rigorous study of that influence. Anecdotalobservations suggest three potential impacts:(1) A GFE can raise prices on claims trades. (2)A GFE can also slow down or stop the market.(3) A GFE can also create a market thatpreviously had not existed. This third effect isimportant to observe because it supports thetheory that GFE publication is not necessarily“anti-trading,” but instead is outcome neutral.

The Case Against GFEs

Receivership community discussions have startedto identify downsides to publication of forward-looking statements such as GFEs. Thesedownsides should be carefully considered and bethe subject of continued discussion.

First, there is some discussion regardingwhether a receiver should be interpreting theinformation that is already made available.Under this view, the receiver’s role is to publishfinancial and legal information about theestate, and allow creditors to make assessmentsabout whether to sell (or not sell). To the extentthe information is not complete or helpful,receivers can focus on providing more andbetter information rather than interpreting theinformation for the public.

Second, the issue of liability must be considered.When the GFE is relied upon, and provesinaccurate, what exposure has the receiver invited?And even if actual exposure to liability is notcreated, a receiver might nevertheless be invitingpractical, public accountability for adverse results.

Third, a receiver may regard the publication of aGFE as outcome-oriented. In other words, areceiver must consider to what degree a GFE is

regarded as encouraging or discouraging claimstrades, no matter what the receiver’s intent.

Concluding Notes

Consideration of the issue of forward lookingstatements has just begun, and can benefit fromfurther discussions and observations regardingtheir real-world impact. These concludingnotes are made with that in mind.

First, a GFE does not necessarily have to addresstiming and amount of distribution. Creditors maybenefit from disclosures about the direction of theestate beyond merely dividend percentage anddistribution data, although those developmentswill be of highest interest to creditors. Lessconclusive observations might square theadvantages and disadvantages of these forward-looking statements.

Second, receivers who have been providingany form of forward-looking statements wouldhelp further the discussion by supplyingobservations about the real world effect, even ifanecdotal.

Third, whether accepting or rejecting forward-looking statements, we must acknowledge thatbetter information and better communicationwith creditors must continue to be a focus of thereceivership community. If further creditorcommunication can moot the arguable need for aforward-looking statement, all the better.

Reasonable minds will differ on the wisdom,necessity and content of forward-lookingstatements. These observations are shared tocontribute to that ongoing discussion. 1 There is some academic discussion regarding claims trading in the bankruptcy

process. See, e.g. Adam Levitan, Bankruptcy Markets: Making Sense of ClaimsTrading, 4 Brook. J. Corp. & Fin. Com. L. 64-109 (2010). Whether because of lowvolume or otherwise, similar academic discussions in the insurance receivershipcontext do not appear to exist.

2 Other examples of Good Faith Estimates can be found at the OSD’s website,www.osdchi.com. Good Faith Estimates have been utilized in at least oneadditional state. See www.ohinsliq.com.

15

Forward-Looking Statements... (continued)

Patrick Hughes is a Senior Directorat Alvarez & Marsal InsuranceAdvisory Services LLC, and is 1stVice President and a Director ofIAIR. He recently served as SpecialDeputy Receiver and CEO to theIllinois Office of the Special DeputyReceiver. The views expressedherein are his own.

16

Welcome IAIR’s Newest Members!

Steven G. Bazil

Steven G. Bazil is the foundingprincipal of Bazil McNulty, anExton, Pennsylvania based law firmthat represents reinsurers of all sizesin the United States, the LondonMarket and around the globe. He

has represented insurers and reinsurers for morethan a decade and his recoveries have involvedclients and adversaries from more than 100countries. To date, his efforts have yieldedrecoveries in excess of 300 million dollars forclients. Mr. Bazil received his B.A. from TempleUniversity in 1988 and his J.D. (cum laude) fromNew York Law School in 1991.

Alexander BurnsAlexander Burns is a Chief Strategistof Southport Lane, a New York Citybased private equity firm that investsprimarily in reinsurance (through itswholly owned subsidiary, SouthportRe), energy, technology and wine. Mr.

Burns also serves as the Chairman of Southport LaneManagement, as well as on the investmentcommittee of Southport Lane, LP.

Mr. Burns is a member of the Structured ProductsAssociation and the Reinsurance Association ofAmerica. He is also a member of the YoungCollectors Council and a voting member of theAcquisitions Committee of the GuggenheimMuseum in New York City.

Ricardo CantiloRicardo Cantilo is an attorneyspecializing in Insurance andReinsurance, Master in Insurance andRisk Management. Ricardo joinedChiltington in 1999 and previouslyserved as head of the Argentine office.

Since 2010 he has been instrumental in thedevelopment of services to the Latin American marketthrough the United States. Mr. Cantilo has writtenmany articles for different market publications ofLatin America, Europe and the United States and hasalso been a speaker at such conferences as AIDA,IAIR, and HB Litigation, among others.

Christopher FullerChristopher Fuller is an experienced insurancereceivership attorney. He is currently the General

Counsel to the Special Deputy Receivers of some ofthe largest and most complex insolvencies in theUnited States. Mr. Fuller is the lead counsel for theSpecial Deputy Receiver of the largest preneed andburial life insurance company insolvency, LincolnMemorial and Memorial Service, and its relatedmanaging general agent, National PrearrangedService. He has also been lead counsel for the receiversof a large number of multi-state insolvencies and hasrepresented both ancillary and domiciliary receivers.

Drexel B. HarrisDrexel Harris is an experienced attorney withmore than 20 years of service to the property andcasualty insurance industry. He currently serves asAssociated General Counsel to Reliance InsuranceCompany (In Liquidation). Prior to liquidation,Mr. Harris advised the Risk Management divisionat Reliance, which serviced Fortune 1000 clients. Inprior positions, he was an associate with theworld-wide law firm of Baker & McKenzie, andstarted his insurance career as an underwriter withAmerican International Group, Inc., where heworked in New York and Bermuda.

He is a Chartered Property Casualty Under writer,a licensed insurance broker in the state of NewYork, and volunteers on the board of directors ofBridge Street Development Corporation, a non-profit specializing in afford able housing andeconomic development.

Robert B. HouseRobert House is a partner in JonesWalker’s Business & CommercialTransactions Practice Group andpractices from the firm's Jacksonoffice. He has insurance regulatory,corporate, and administrative

experience and provides general counselrepresentation to several insurance and insurancerelated entities. Mr. House advises insurers oncompany formation, mergers and acquisitions,Form A and other insurance holding company actfilings, reinsurance transactions, regulatoryexamin ations and legislation, as well as businessand regulatory related litigation matters.

Mr. House is the past chair of the InsuranceRegulation Committee of the American BarAssociation's Tort Trial and Insurance PracticeSection and is an active member of the Federation ofRegulatory Counsel, Inc., which recognizes attorneys

representing those in the insurance industry. He isalso a Certified Public Accountant.

Van R Mayhall IIIVan R. Mayhall, III, is a partner in theBaton Rouge office of Breazeale,Sachse & Wilson and practices in theareas of Business and Corporate Law.He has extensive legal experience withstrategic and enterprise legal issues

affecting ongoing businesses. Mr. Mayhall is also theauthor of the Insurance Regulatory Law blog(InsuranceRegulatoryLaw.com) discussing news,information, and commentary on insuranceregulatory law, issues related to insurance regulationand insurance law in general, including state as wellas federal insurance regulation.

Keith McCormackKeith McCormack is a portfolio manager forContrarian Capital Management, L.L.C. He joinedContrarian in 2004 and is responsible for the firm'sdistressed direct lending efforts as well as the tradeclaims fund. Prior to joining Contrarian, he was aDirector with UBS Investment Bank’s LeveragedFinance Group where he was responsible for advisingprivate equity clients on mergers & acquisitions,restructurings, and capital raisings including bank,high yield, and mezzanine debt, as well as initialpublic offerings. Earlier in his career, Mr. McCormackwas a Vice President with Donaldson, Lufkin &Jenrette / Credit Suisse’s Leveraged Finance Group,and an Audit Manager with Deloitte & Touche, LLP.Mr. McCormack graduated Beta Gamma Sigma witha MBA from Indiana University and received a BAfrom Catholic University of America. He is also aCertified Public Accountant.

Paul Merlino, ACAS, MAAA, CFA

Paul Merlino is a Principal ofMerlinos & Associates with 27 yearsof experience in the actuarial field,22 of which have been in privatepractice. Prior to joining Merlinos &Associates, he worked in the

property & casualty actuarial department of themanagement consulting division for KPMG PeatMarwick. Mr. Merlino has testified in variousforums on rate, reserve, solvency and tort reformissues on behalf of insurance company clients andregulatory authorities, and has participated as aguest speaker at university actuarial clubs.

Roger H. SchmelzerRoger Schmelzer is the President andCEO of the National Conference ofInsurance Guaranty Funds. He worksat the state and national level to assureNCIGF’s members are fully supportedin meeting statutory obligations to

policyholders and claimants in their states. He isexperienced in all aspects of organizationalmanagement, public representation, development ofstrategic initiatives, and their implementation. Mr.Schmelzer earned his Juris Doctorate degree fromIndiana University.

Tanikqua YoungTanikqua Young is a staff attorney inthe Office of Financial Counsel in theLegal Section of the General CounselDivision at the Texas Department of In -surance. The office provides counsel tothe Financial Program, including the

Rehabilitation and Liquidation Oversight Division.During her time at the Department, she has worked onissues for pre-need companies in receivership andlitigation and has assisted with oversight of Special De -puty Receiver administration. She has also worked onpost-receivership issues regarding assignment of assets.

Ms. Young holds a Bachelor of Arts degree from TheUniversity of Texas and a Juris Doctorate degree fromThe University of Texas School of Law.

John WellsJohn Wells is the Director of Operations of theLouisiana Insurance Guaranty Association. He hasoverseen LIGA’s implementation of imaging andelectronic data interchange systems and itsconversion to a new claims system and works toimprove LIGA’s efficiency and effectiveness inresolving claims of failed insurers. Nationally, Mr.Wells sits on the National Conference of InsuranceGuaranty Funds’ Accounting Issues Committee aswell as several estate coordinating committees.

Prior to his appointment at LIGA, Mr. Wells spent15 years at the Louisiana Receivership Office,where he led receivership’s policyholder services,claims, collections and reinsurance efforts, andwas also responsible for pursuing director andofficer suits, accounting malpractice suits, andother core litigation for two now closed estates. Hehas had experience in the liquidation of life,health, property, casualty and HMO insurers.

17

Welcome IAIR’s Newest Members! (continued)

18

Steven Durish

After years of serving as Director of Special Projects at the Texas Propertyand Casualty Insurance Guaranty Association, Steve has moved north toassume the position of President of the Ohio and West Virginia InsuranceGuaranty Associations. Congratulations Steve!

Jonathan Bing

A smiling Jonathan Bing has moved on from his post as Special DeputySuperintendent in charge of the New York Liquidation Bureau - and yearsof service in the public sector - to join Wilson Elser Moskowitz Edelman &Dicker as a partner in its Government Relations practice. Prior to his stintat NYLB, Jonathan had served in the New York State Assembly sinceNovember of 2002.

The IAIR Bulletin Board

Patrick Hughes

Pat Hughes has also joined the private sector after serving almost fiveyears as Special Deputy Receiver and CEO of the Illinois Office of theSpecial Deputy (“OSD”) and has assumed the position of Senior Directorat Alvarez & Marsal Insurance Advisory Services as a Senior Director. Patserved almost five years as Special Deputy receiver and CEO of OSD, andbefore that held senior regulatory positions with the state as GeneralCounsel to the Department of Financial and Professional Regulation andChief Legal Counsel to the Office of the Governor.

If you want to see your news here, please contact IAIR’s Association Manager,Bernie Heinze at Bernie@accolatemgt.com. We’d love to publish more about ourmembers so please let us know what you are up to from time to time.

Doug Hartz

As an update to a note we published in the last newsletter… Doug is onthe move in two ways…A recovered (note the new helmet) Doug Hartz isback to his cycling routine and has, on the other hand, returned to thepublic sector (oh my!) and moved south. Doug has now assumed theposition of Director of Rehabilitation and Liquidation Oversight at theTexas Department of Insurance.

The long-planned affiliation between IAIRand the Tort and Insurance Practice Section ofthe American Bar Association is up andrunning! The understanding between the twogroups provides a framework for benefits toboth sides. The working components of TIPSare its 31 committees devoted to substantivelaw concerning insurance and torts of allkinds. Most of them produce newsletters,journals, and, most of all, educationalprograms, and they offer opportunities forspeaking and writing, as well as ways to learnthe “in’s and out’s” of specialized areas fromexperts.

The primary tangible benefit of the affiliationwith TIPS is the opportunity for cross-sponsorship of educational programs. WhenIAIR and one or more of the TIPS committeescross-sponsor an event, we promote it to ourmembership and members of both groupsreceive the “member” registration rate. Thereare also opportunities for members of eachgroup to become involved in the planning ofthese programs. TIPS has over 25,000members, so IAIR’s relationship with TIPSoffers terrific opportunities to reach newaudiences and to promote IAIR’s agenda ofencouraging knowledge and understanding ofthe receivership process, and excellence andprofessionalism in its operation. As receivers,we frequently find ourselves confronted withsubstantive areas of insurance and tort lawthat are unfamiliar to us. Access to TIPS offersIAIR members a “deep bench” of knowledge,literature, and experience across the wholespectrum of the insurance world, and manygreat opportunities for IAIR members todistinguish themselves, too. We look forwardto a great collaboration with TIPS!

To see a list of the TIPS substantivecommittees, and links to their leadership, goto: http://www.americanbar.org/groups/tort_trial_insurance_practice/committees.html.

Admiralty and Maritime Law

Alternative Dispute Resolution

Animal Law

Appellate Advocacy

Automobile Law

Aviation and Space Law

Business Litigation

Commercial Transportation Litigation

Corporate Counsel

Employee Benefits

Employment Law and Litigation

Excess, Surplus Lines and Reinsurance

Fidelity and Surety Law

Government Law

Health and Disability Insurance Law

Insurance Coverage Litigation

Insurance Regulation

Intellectual Property Law

International Law

Life Insurance Law

Media, Privacy and Defamation Law

Medicine and Law

Products Liability Committee

Professionals, Officers and Directors Liability

Property Insurance Law

Self Insurers and Risk Managers

Staff Counsel

Title Insurance Litigation

Toxic Torts and Environmental Law

Trial Techniques

Workers’ Compensation and Employers Liability

19

IAIR Launches New Affiliation With ABA/TIPS

20

Join us in Savannah, GA for the 2013 Insolvency Workshop!

SPOTLIGHT ON CURRENT ISSUESHilton Savannah Desoto: January 29-31, 2013

TUESDAY, JANUARY 29, 2013

6:00 - 7:30 pm Opening Night Reception

WEDNESDAY, JANUARY 30, 2013

7:15 - 8:00 am Registration & Continental Breakfast

8:00 - 8:15 am Welcome and Introduction

8:15 - 9:30 am “The Right Choice”- Private Runoff, Rehabilitation or Liquidation

Moderator: David Wilson, CEO and Special Deputy Insurance CommissionerConservation & Liquidation Office, State of California

Presenters: Jonathan Bank, Esq.Locke Lord Bissell & LiddellStephen Schwab, Esq.DLA Piper Wayne Wilson, Executive DirectorCalifornia Insurance Guarantee AssociationIain Nasatir, Esq.Pachulski Stang Ziehl & Jones

9:30 - 10:15 am “Life Insurer’s Liabilities- Some things to be concerned about”

Presenter: Gary Monnin, FSA, MAAG.P. Monnin Consulting Inc.

10:15 - 10:35 am BREAK

10:35 - 11:35 am Life Insurers’ Hedging and Hedging Devices

Presenters: Edward ToyNAIC Capital Markets BureauIlene G. Kelman, CFADirectorDeutsche Insurance Asset Management

11:35 - 12:10 am Beginning Session of “Participatory Exercise”

Presenters: Holly Bakke, Managing DirectorStrategic Initiatives Management Group, LLCChristopher Maisel, Esq. CIR L&H

12:10 - 1:30 pm Lunch and Luncheon Speaker

RALPH T. HUDGENSInsurance Commissioner, State of Georgia (invited)

1:30 - 2:30 pm “The Ambac Rehabilitation and its Objectors”

Presenters: Michael B. Van Sicklen, Esq.Foley & Lardner LLPGreg Mitchell, Esq.Foster Brown Todd LLC

2:30 - 3:15 pm “Life Insurer’s Assets- Traps and Pitfalls in the Quest for Yields”

Presenters: Patrick H Cantilo, Esq. CIR-MLCantilo & Bennett L.L.P.Mark F. Bennett, Esq.Cantilo & Bennett L.L.P.

3:15 - 3:30 pm BREAK

3:30 - 4:20 pm Nuances of Mortgage Insurance and Surety

Truitte ToddTharp and Associates, IncSpecial Deputy ReceiverPMI Mortgage Insurance CoRobert Nefsky Esq.Rembolt Ludtke LLP

4:20 - 5:45 pm Participatory Exercise-Teams Working Session

6:00 - 7:30 pm Cocktail Reception

THURSDAY, JANUARY 31, 2013

7:30 - 8:00 am Continental Breakfast

8:00 - 9:00 am Participatory Exercise-Teams meet to finalize their report

9:00 – 10:00 am Guaranty Association Expenses- An Administrative Expense or NOT!Presenters: Steve Davis Esq.

Stradley Ronon Stevens & Young LLPThomas Jenkins Esq.Locke Lord Bissell & Liddell

10:00 – 10:30 am BREAK

10:30 - 12:00 pm Participatory Team Presentations

12:00 - 12:45 pm Open Forum –Questions & Comments Regarding Participatory Exercise

12:45 - 1:00 pm Program-Wrap Up

Dennis LaGory, Esq.

21

Join us in Savannah for the 2013 Insolvency Workshop!

22

The IAIR Sponsor Program offers three levels of participation:

Each level of participation includes the value-added benefits described below reducing theeffective cost of the sponsorship.

• Credit against IAIR dues for up to two representatives ofSponsor (value up to $750).

• Credit against IAIR Workshop registration fees for up tothree representatives of Sponsor (value up to $2,250).

• One representative of Sponsor to serve on IAIR Board ofAdvisors, consisting of past IAIR presidents and IAIRPlatinum Sponsors.

• IAIR will post sponsors’ logos at the bottom of the IAIRHome Page in a “Thank You to Our Sponsors” area.Additionally, a tab at the top of the IAIR Home Page will be labeled “IAIR Sponsors” and will link to a page wheresponsors will be grouped by category as Platinum, Gold or Silver. That page will display for each sponsor thefollowing: the sponsor’s logo, its name or trade name, a brief

description of the services it provides and a link to a pagedesignated by the sponsor on the sponsor’s web site.

• Speaker role annually for a representative of the Sponsor (orits designee) at one of the IAIR Issues Forums or an IAIRWorkshop, or an article in the Receiver, IAIR to have finalapproval on speaker/author and topic.

• Two full page ads each year in Receiver magazine (currentvalue $1100).

• Space on a materials table for Sponsor at all IAIR events.• Recognition of Sponsor on the IAIR website, in each issue of

the Receiver, and at all IAIR events.• These value-added benefits reduce the effective cost to the

Sponsor by 55% to $3,400.

• Credit against IAIR dues for one representative of Sponsor(value up to $375).

• Credit against IAIR Workshop registration fee for onerepresentative of Sponsor (value up to $750).

• IAIR will post sponsors’ logos at the bottom of the IAIRHome Page in a “Thank You to Our Sponsors” area.Additionally, a tab at the top of the IAIR Home Page will be labeled “IAIR Sponsors” and will link to a page wheresponsors will be grouped by category as Platinum, Gold orSilver. That page will display for each sponsor the following:the sponsor’s logo, its name or trade name, a brief

description of the services it provides and a link to a pagedesignated by the sponsor on the sponsor’s web site.

• One full page ad each year in Receiver magazine (currentvalue $550).

• Space on a materials table for Sponsor at all IAIR events. • Recognition of Sponsor on the IAIR website, in each issue of

the Receiver, and at all IAIR events. • These value-added benefits reduce the effective cost to the

Sponsor by 42% to $2,325.

• Credit against IAIR dues for one representative of theSponsor (value up to $375).

• A 10% discount on IAIR Workshop registration fee for onerepresentative of the Sponsor (value up to $75).

• IAIR will post sponsors’ logos at the bottom of the IAIRHome Page in a “Thank You to Our Sponsors” area.Additionally, a tab at the top of the IAIR Home Page will be labeled “IAIR Sponsors” and will link to a page wheresponsors will be grouped by category as Platinum, Gold or

Silver. That page will display for each sponsor the following:the sponsor’s logo, its name or trade name, a briefdescription of the services it provides and a link to a pagedesignated by the sponsor on the sponsor’s web site.

• Space on a materials table for Sponsor at all IAIR events. • Recognition of Sponsor on the IAIR website, in each issue of

the Receiver, and at all IAIR events. • These value-added benefits reduce the effective cost to the

Sponsor by 30% to $1,050.

We invite you to join IAIR's Corporate Sponsor Family

GOLDSPONSOR

SILVERSPONSOR

PLATINUMSPONSOR $7,500 annually

$4,000 annually

$1,500 annually

22

IAIR 2012 Committee Chairs

24Executive CommitteeFrancesca G. Bliss

Strategic Planning CommitteeFrancine L. Semaya, Esq.

Operations CommitteeJenny JeffersDale Stephenson

Accreditation & EthicsJoseph DeVito, CPA, AIRMichael FitzGibbons

Designation Standards(Subcommittee of A&E)

Daniel Watkins, CIR-ML

Communications CommitteeEvan Bennett

Marketing Committee(Subcommittee of Communications)

Holly BakkeEvan Bennett

Newsletter Committee(Subcommittee of Communications)

Michelle Avery, CPA

Publications Committee(Subcommittee of Communications)

Dennis LaGory, Esq.

External Relations CommitteeMary Cannon Veed, Esq., AIR-LegalDouglas Hertlein

Guaranty Fund Committee(Subcommittee of External Relations)

Lynda LoomisWayne Wilson

Finance CommitteeDonna Wilson, CIR-ML

Governance CommitteeDennis LaGory, Esq.

Audit Committee(Subcommittee of Governance)

Evan Bennett

By Laws Committee(Subcommittee of Governance)

Dennis LaGory, Esq.

Elections Committee(Subcommittee of Governance)

Dick Darling, CIR-ML

Member Services CommitteeDouglas Hartz, Esq., CIR-MLDonna Wilson, CIR-ML

Education Committee(Subcommittee of Member Services)

Douglas Hartz, Esq., CIR-MLJames Kennedy, Esq.

International Committee(Subcommittee of Member Services)

Vivien Tyrell, Esq.

Membership Committee(Subcommittee of Member Services)

Kerby Baden Donna Wilson, CIR-ML

www.iair.org

If you are interested in participating as an IAIR sponsor, advertiser or wish to receiveinformation about IAIR membership or committee participation, please contact Bernd G. Heinze, Esq., Association Manager, International Association of InsuranceReceivers, telephone 610.992.0015 • bernie@accolademgt.com

IAIR InsolvencyWorkshop

January

29-312013

Savannah, GAHilton Savannah Desoto

NAIC Spring Meeting

April

6-9 2013

Houston, TXHilton Houston and Four Seasons Houston

NAIC Summer Meeting

August

24-272013

Indianapolis, INJW Marriott and Mariott Downtown