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Pennsylvania Court Denies Liquidation of Two Insurers

A Commonwealth Court judge has denied the Pennsylvania Insurance Department’s request to liquidate two insurers and offered some strong language about the department’s failure to help rehabilitate the insurers
May 15, 2012

A Commonwealth Court judge has denied the Pennsylvania Insurance Department’s request to liquidate two insurers and offered some strong language about the department’s failure to help rehabilitate the insurers. Judge Mary Hannah Leavitt denied a request by Michael F. Consedine, Pennsylvania’s insurance commissioner, to liquidate Penn Treaty Network America Insurance Co. and its subsidiary, American Network Insurance Co. Consedine had been brought in to rehabilitate the two long-term care insurers, but then requested those rehabilitations be converted into liquidations, according to the opinion in Consedine v. Penn Treaty Network America Insurance.

“The insurance commissioner, wearing his hat as a regulator of the Pennsylvania insurance industry, refused to approve the companies’ actuarially justified rate increase filings in the amount requested, both before and after rehabilitation,” Judge Leavitt said. “The commissioner has even discouraged other state regulators from approving rate increases. Now the commissioner seeks to liquidate the companies because their premium rates are inadequate.” Finding that Mr. Consedine did not undertake a meaningful effort to rehabilitate the companies and “to the contrary, has acted to frustrate rehabilitation,” Judge Leavitt denied the petitions and ordered the commissioner to create a plan for rehabilitation for the companies within 90 days.

Read more on the court liquidation decision: Judge Denies Pa. Insurance Dept. Liquidation Bid (Pittsburgh Post-Gazette 5/14/12)

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