Washington State Office of the Insurance Commissioner

Petition filed to liquidate Penn Treaty

The Pennsylvania Insurance Department filed petitions on Oct. 2 to liquidate both Penn Treaty Network American and its subsidiary, American Network.

Together, the companies provide long-term care insurance to more than 120,000 policyholders in all states and the District of Columbia.

Washington state has about 3,700 Penn Treaty policyholders and no known American Network policyholders.

 

I'm a policyholder, what does this mean to me?

What is a guaranty fund?

Should I stop paying my premium?

Will I get my premium back?

How do I file a claim under a liquidation?

Who do I contact with questions?

 

I'm a policyholder, what does this mean to me?

First, the court where the petition was filed must issue an order. Your policy will not be canceled unless you choose to cancel it. In the meantime, your policy will be transferred to the Washington Life and Disability Insurance Guaranty Association. You should continue to pay your premium and file claims as you have in the past, until notified by the guaranty association.

What is a guaranty association?

Guaranty associations protect policyholders from bankrupt insurers. Most licensed insurers are required to belong to the association. They pay an assessment based on their premium. The assessment is used to fund the association and pay claims.

As soon as the court orders a company into liquidation, it will appoint a liquidator. The liquidator will forward claim and policy information to the Washington Life and Disability Insurance Guaranty Association.

The associations will pay the claim - subject to the policy limit or the association limit of $500,000, whichever is less - and continue to administer the policy. There is no deductible. Claims for policy benefits the association doesn't pay become claims against the liquidation estate and are paid proportionately with all other policy claims. If you have a claim not covered by the association, you have until Oct. 4, 2010 to file proof of the claim.

In most cases, claim payments start within 60-90 days after a court issues a liquidation order.

Should I stop paying my premium?

No, not if you want to keep your policy.

Will I get my premiums back?

Generally, you cannot claim premium you've already paid. If you've paid premium for future coverage and want to cancel your policy and get your money back, you may be able to file a claim.

How do I file a claim under a liquidation?

If the court approves the petition and issues an order, the order will include the claim filing process. We expect the order of liquidation to authorize the liquidator to continue receiving, processing, and paying claims, in order to facilitate the transfer to the guaranty association. The guaranty association will notify you of any changes in the way claims will be paid.


Who do I contact with questions?


Policyholders and other interested parties will receive further information about the liquidation when the court enters an order.

In the meantime, policyholders with questions on claims or non-claim matters may call the Penn Treaty receiver, toll-free, 1-800-362-0700, ext. 3270.

 

 

 



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