FAQ Regarding the Delaware Department of Insurance Actions Related to Ullico Casualty Company in Receivership
On May 30, the Delaware Chancery Court issued a Liquidation and Injunction Order with Bar Date (“Liquidation Order”) in the receivership proceedings for Ullico Casualty Company, in response to a petition by the Receiver for Ullico Casualty Company. The Receiver’s petition noted that the Order was requested, in part, to obtain access to state guaranty funds for claims payments. Ullico Inc.'s management team is cooperating with the Receiver and is providing assistance to the Receiver's staff. Below are questions that may arise as a result of the Order. Although we are providing this information to you to assist you in understanding the receivership proceedings, the Receiver and the Court will ultimately determine the course of the liquidation proceedings and the obligations and rights of the Receiver. You are also encouraged to consult with your own advisors and attorneys about your rights in the receivership proceeding. The Liquidate Order contains some provisions that are not addressed below, and we encourage interested parties to review the Liquidation Order in its entirety.1. What is "Liquidation"?
"Liquidation" is a process under which the Receiver, upon the Delaware Chancery Court's order, winds down an insurance company's business, cancels remaining in-force policies, and maximizes the value of the company's assets to meet obligations to policyholders and other creditors, as provided for by law.
According to the Receiver’s petition for the Liquidation Order, the Receiver determined during the period of the earlier Rehabilitation and Injunction Order that Ullico Casualty Company’s financial difficulties, which largely related to losses from the discontinued Workers Compensation programs and Surety line of business, were too large and that further efforts to rehabilitate the company would be useless. The Liquidation Order gives the receiver some tools to manage the assets and obligations of the company that did not exist under the Rehabilitation Order. Further, the Liquidation Order is expected to trigger the obligations of guaranty associations in the various states to pay claims of insureds, subject to any applicable limits.
Ullico Casualty Company is a property and casualty insurance company, and is one of Ullico Inc.'s Family of Companies, which also includes:
- The Union Labor Life Insurance Company;
- Ullico Casualty Group, Inc.;
- Ullico Investment Company, Inc.; and
- Ullico Investment Advisors, Inc.
The Liquidation Order has only been placed on Ullico Casualty Company. The other Ullico Inc. subsidiary companies – The Union Labor Life Insurance Company; Ullico Casualty Group, Inc.; Ullico Investment Company, Inc.; and Ullico Investment Advisors, Inc. – are operating as normal.
- The Union Labor Life Insurance Company is domiciled in Maryland, and its life and health insurance operations remain in a strong position. The company posted impressive operating income in 2012. It will continue to offer its complete product line to its customers. The assets of The Union Labor Life Insurance Company are not affected by the Liquidation Order.
- Ullico Investment Advisors, Inc. and Ullico Investment Company, Inc. continue to offer all products and services for institutional investors. These companies are regulated by the federal government. Products for institutional investors remain unchanged and all products and services will continue to be offered. The assets of these companies are not affected by the liquidation process.
- "J for Jobs," Union Labor Life's flagship investment product sold through Ullico Investment Company, Inc., is currently involved with exciting commercial real estate developments around the country. The infrastructure investment opportunities are generating enthusiastic support in our marketplace. Investors in the company's suite of competitive investment products can rest assured that the Liquidation Order does not affect their investments.
Ullico Casualty Group, Inc. (Ullico Casualty Group), founded in 1999, is a member of the Ullico Family of Companies. It is a Managing General Agency representing insurance carriers that provide coverage to its core union clients, trust funds and related labor organizations. These products include:
- Fiduciary Liability Insurance
- Governmental Fiduciary Liability Insurance
- Union Liability Insurance
- Commercial Package Insurance
- Workers' Compensation Insurance
Ullico Casualty Group is highly regarded for its underwriting and claims management expertise in the union marketplace. This is attested to by the relationships it has formed with three "A" rated carriers in the past year.
Over the last several years, Ullico Casualty Company and Ullico Casualty Group have offered policies written with several fronting carriers in addition to policies written on its own paper. If you refer to the declarations page of your policy it will specify which insurance carrier provides your insurance.
Before the new relationship involving Ullico Casualty Group and Alterra America Insurance Company (“Alterra America”), Ullico Casualty Company wrote coverage through Hudson Insurance Company and State National Insurance Company as fronting carriers. This meant that although coverage was written on the fronting carrier's paper, claims costs were ultimately paid by Ullico Casualty Company. Ullico Casualty Company had also established well-funded collateral accounts to be available to pay claims and those accounts are not under the receiver’s control. Claims on Hudson and State National professional lines policies are being paid from those accounts and we do not anticipate any disruption in the payment of claims. Ullico Casualty Group continues to administer these claims, as it has in the past.
In 2012, Ullico Casualty Group entered into a long-term agreement with Alterra America Insurance Company (“Alterra America”), which has a financial strength rating (FSR) of A XV (Excellent) (as of March 31, 2013) by A.M. Best Company. Under this agreement, Ullico Casualty Group and Alterra America provide competitive multiemployer and government fiduciary liability and union liability insurance.
The partnership with Alterra America is a key component to Ullico's strategy to return to its core mission of serving the union market place with "A" rated carriers. In 2013, Ullico Casualty Group began offering new and renewal fiduciary and union liability insurance policies through Alterra America. Policies up for renewal will be placed with Alterra America, with Ullico Casualty Group providing its expert underwriting and claims management.
The policies provided through this relationship are not reinsured by Ullico Casualty Company.
No. The relationship with Alterra America does not involve Ullico Casualty Company in any way.
The Liquidation Order authorizes the Receiver to cancel Ullico Casualty Company policies by June 30, 2013. Through highly rated insurance carriers, Ullico Casualty Group will continue to offer commercial insurance products, including workers' compensation coverage for union halls.
Most of these policies have been written through State National Insurance Company or Hudson Insurance Company. The advantage of having written these policies through an “A” rated front is that, before the receivership began, Ullico Casualty Company had deposited sufficient funds in collateral accounts for the benefit of both of these carriers to provide for the payment of claims. Claims on Hudson and State National professional lines policies are being paid from those accounts. Ullico Casualty Group continues to administer these claims, as it has in the past.
Since February 1, 2013, fiduciary and union liability policies have been written with Alterra America and are unaffected by the Liquidation and Injunction Order. In addition, Alterra America, in support of Ullico Casualty Group and its continuing program, has backed all State National policies since February 1, 2013. This means that if your State National policy has an effective date on or after February 1, it is also unaffected by the liquidation process.
Please submit claims for State National, Hudson and Alterra America policies by emailing firstname.lastname@example.org.
For those fiduciary and union liability policies written directly on Ullico Casualty Company, the Receiver should be contacted regarding claims, because Ullico Casualty Group will not be administering those claims. The Receiver has set up a phone number (1 (800) 218-1044) and a website (http://delawareinsurance.gov/departments/berg/rehab_bureau.shtml) where claimants can obtain information about the submission and status of claims.
The Receiver should be contacted regarding claims, because Ullico Casualty Group will not be administering those claims. The Receiver has set up a phone number (1 (800) 218-1044) and a website (http://delawareinsurance.gov/departments/berg/rehab_bureau.shtml) where claimants can obtain information about the submission and status of claims.
Yes. If you have any fiduciary, governmental, or union liability policy written through Alterra America, your policy is unaffected by the liquidation process. Also, if you have a policy through State National with an effective date of February 01, 2013 or after, your policy is unaffected by the liquidation process.
If you would like loss runs for your Ullico Casualty Company policy sent to you, please send your request to email@example.com.
Ullico is an 85-year-old insurance company owned by labor unions. The company will continue to provide union leaders, trustees, members and union employers with a variety of insurance coverage including supplemental life and group life insurance products, and property-casualty insurance. Ullico has built its reputation for innovative products specifically designed for its unique labor union customer. Several new product lines will be launched this year. And, in partnership with other A-rated insurance companies, Ullico Casualty Group will be able to offer its traditional menu of property-casualty insurance products including fiduciary liability coverage, property coverage for union-owned facilities, and other property-casualty products. Ullico Casualty Group, our managing general agency, provides the same level of protection for union property-casualty risk as it has in the past through its partnerships with "A" rated insurance carriers.
Union Labor Life will continue to invest in commercial real estate projects under its flagship "J for Jobs" investment product. Ullico will also continue to grow its infrastructure investment business, and serve as a leader in forging public-private partnerships designed to re-build America's aging infrastructure.
Information about all of Ullico's products and services are available on the company's website, www.ullico.com. Ullico Inc. will remain the leader in insuring union risk.