At a Glance
SUSAN F. COGSWELL, Commissioner
Office of the Insurance Commissioner Established – 1865
Insurance Department Established – 1871
Statutory authority – CGS Title 38a
Central Office – 153 Market Street, Hartford, CT 06103
Number of employees – 141
Recurring operating expenses – $18,403,641 – Fiscal Year 2004-2005
Organizational structure – Administrative Division; Computer Systems Support; Consumer Affairs Division; Financial Regulation Division; Licensing Division; Life and Health Division; Market Conduct Division; Property and Casualty Division.
It is the mission of the Insurance Department to protect Connecticut consumers by administering and enforcing insurance laws. The agency accomplishes this goal by ensuring the financial reliability and responsibility of all regulated entities.
The insurance laws administered by the Insurance Department are set forth in Title 38a of the Connecticut General Statutes. They are divided into 28 chapters, each addressing a separate area of insurance regulation and insurance-related entities and products.
The Financial Regulation Division monitors the financial condition of domestic and foreign companies, health care centers and fraternal benefit societies authorized to do business in Connecticut. The analysis and compliance staff accesses financial information directly from the National Association of Insurance Commissioners’ (NAIC) database and, in many instances, the field examination staff can electronically access company data files to perform substantive testing. The Division has a priority-based approach to analysis and examination that is designed to provide timely identification of potential solvency concerns, and facilitate earlier regulatory intervention.
The actuarial staff is currently assigned within the various divisions. Procedures are in place to ensure that actuarial input is provided to various department functions and procedures. The actuarial staff participates in the analysis of the financial statements and other statutorily required information. Actuaries also conduct on-site examinations of insurance companies. The actuaries are responsible for examining the policies and rates filed for all life, health and property/casualty insurance companies to ensure compliance with Connecticut statutory requirements.
The Consumer Affairs Division receives, reviews and responds to complaints and inquiries from Connecticut residents concerning insurance-related problems. During Fiscal Year 2004-2005, 8,824 formal complaints were logged into the Division’s computer database. As a result of the review of these complaints, the Division recovered $3,445,857 for Connecticut consumers in Fiscal Year 2004-2005. Additionally, the Division responded to 1,181 requests for informational pamphlets and booklets. Consumer Affairs also conducted a number of outreach programs designed to focus on, respond to and educate consumers on insurance matters. During Fiscal Year 2004-2005, the outreach program continued to focus on senior groups, variable Annuity (suitability) sales to seniors, small business owners, health fairs and medical providers. During the year, the Division’s outreach representatives spoke to more than 3,000 Connecticut residents.
The Legal Division directs the receivership and guaranty fund activities of the Insurance Department, and provides legal advice and related services to the Commissioner and the seven divisions of the Insurance Department on a broad spectrum of issues that arise in regulating the insurance industry. The legal staff also drafts, monitors and analyzes legislation; drafts and promulgates regulations; and participates in department hearings involving rates, license enforcement, and acquisitions of domestic insurance companies.
The Licensing Division is responsible for licensing professionals to ensure the quality and integrity of individuals and organizations in Connecticut which sell insurance products, provide insurance consulting service, or adjust insurance claims. The Licensing Division meets this benchmark by developing and maintaining up-to-date standards and educational programs for all licensees.
The Life and Health Division reviews policy form and rate filings for all life and health insurance products to ensure compliance with Connecticut General Statutes and regulations. The Division oversees the external appeals process and the expedited review process for managed care organizations; licenses utilization review companies; preferred provider networks; medical discount plans and viatical settlement companies; and publishes a managed care report card. It also publishes lists of carriers offering Medicare supplement, long term care, small employer group health, individual health and HMO policies. The Division provides technical assistance to other divisions, agencies and the Legislature, promulgates regulations and takes enforcement action against carriers regarding non-compliance issues.
The Market Conduct Division performs examinations of insurance companies, health care centers, fraternal benefit societies, and medical utilization review companies doing business in Connecticut to analyze the treatment of Connecticut policyholders and claimants. In order to provide protection to the insurance consumer, the Division also investigates allegations of improper conduct against individual licensees and pursues administrative action when warranted.
The primary responsibility of the Property Casualty Division is to examine property and casualty insurance rates, rules, policy forms and underwriting guidelines to ensure that the insurance products sold in Connecticut by licensed carriers comply with Connecticut statutory requirements. This is accomplished through review, analysis, oversight and approval of insurance company programs covering home and automobile insurance; business property and liability; medical, legal and other professional liability; and workers’ compensation insurance. The Division also oversees the operation of assigned risk plans for automobile, property and workers’ compensation insurance.
The Financial Regulation Division received a successful interim accreditation review for the year ending December 2004. The Division completed review and approval of three mergers or acquisitions of control of a Connecticut domiciled insurer. The Division also actively supervised four Connecticut financially distressed domestic insurers during the year with none going into liquidation.
During Fiscal Year 2004-2005, Consumer Affairs staff met with members of the state of Connecticut Medical Societies, Physical Therapy Association, the HMO Association, Connecticut State Dental Association, Connecticut Society of Eye Physicians, and other interested parties to address medical provider concerns about coverage and claims issues. The Consumer Affairs Division also converted to a new computer database. The new system improves the ability to communicate with consumers and reduce the time in bringing their complaints to a resolution.
Throughout the year, Consumer Affairs representatives met with staff members from the Ombudsman’s Office and federal government agencies to coordinate distribution of information regarding those insurance-related products over which they have jurisdiction, i.e., Medicare and self-insured plans. In addition, during the second quarter, Consumer Affairs staff attended training seminars on the new Medicare prescription drug cards.
The Consumer Affairs Division’s medical/social outreach program educated the medical community on insurance matters, reviewed complaint files involving medical necessity and represented the Insurance Department on a number of committees, including the Cancer Society, Children with Special Health Care Needs and the Diabetes Educational Committee.
During Fiscal Year 2004-2005, the Insurance Department’s Computer Support Services began implementation of a new automated system on a division by division basis. The system, named “CRIS” for Connecticut Regulatory Information System, is designed to increase automation in the Department, improve efficiency for our customers, and reduce paper and paper processing by relying on document imaging technology. Development of CRIS is being developed in cooperation with the University of Connecticut. The Licensing Division and the Consumer Affairs Division were the first to utilize the new system. The goal for Fiscal Year 2005-2006 is to complete automation of the other divisions within the Insurance Department. In the future, additional customer service improvements will be made by the implementation of various internet-based services.
The Legal Division, during Fiscal Year 2004-2005, promulgated four regulations and assisted department divisions in 88 administrative enforcement proceedings or stipulated settlements that resulted in the assessment of $1,578,688.15 in fines and penalties. The Division also supported 34 insurance rate hearings and participated in three hearings under the Connecticut Insurance Holding Act regarding the merger or the acquisition of control of a Connecticut domiciled insurer.
The Licensing Division is an on-going participant in an effort to allow insurance licensees, insurance companies and the public to access insurance license information on-line through the Connecticut Licensing Information Center (CLIC). This site allows consumers to view the name, license number, type, termination date and authority of licenses on the web at www.ct-clic.com.
In October 2004, the Life and Health Division published the annual managed care report card, A Comparison of Managed Care Organizations in Connecticut. The Division also surveyed health maintenance organizations for the Department of Social Services’ report card for Medicare Risk Plans in Connecticut. In 2004, there were 114 requests for external review, 43 of which reversed the denials of the utilization review companies. The Division processed approximately 14,000 rate and form filings, including electronic submissions through the System for Electronic Rates and Form Filings. In addition, licenses were issued or renewed to 120 utilization review companies. In 2004, the department licensed 16 preferred provider networks.
The Market Conduct Division opened 44 examinations of Property/Casualty, Life and Health and Utilization Review companies, and 143 investigations involving individual licensees. These examinations and investigations resulted in $1,101,811 in fines, as well as other actions including revocations, surrenders, and probations or cancellations of insurance licenses.
The Property and Casualty Division received over 4,000 insurance program filings of rates, rules and forms in 2004. The Division approved an overall –0.3 percent rate level change for workers’ compensation insurance for employers in the voluntary market and a decrease of –6.4% in the assigned risk plan in Connecticut. In addition, in an effort to facilitate insurance company compliance with state laws and regulations, the Property and Casualty Division posted on the Department’s web site regulations pertaining to property and casualty insurance.
As reported by the Financial Regulation Division, as of July 1, 2004 there were 1,192 insurance companies licensed in Connecticut. Of that total, 122 were domiciled in the state of Connecticut. The applications of 15 insurers applying for admissions were reviewed in Fiscal Year 2004-2005. Of the 15 applications reviewed, 10 were licensed and five were rejected and/or withdrawn. In addition, 23 companies ceased to be licensed through dissolution, merger or voluntary surrender of their certificates of authority. As of June 30, 2005, 1,179 insurers were authorized to transact business in Connecticut. During Fiscal Year 2004-2005, 36 on-site examinations of Connecticut domiciled insurers were completed. As of June 30, 2005, there were six examinations in progress.
The following table indicates calendar year 2004 direct premiums written in Connecticut:
Life, Health and Annuities $22,356,318,517
Property and Casualty Lines 6,431,153,695
Health Care Centers 2,520,450,972
Fraternal Benefit Societies 45,810,080
Surplus Lines 380,871,176
Risk Retention Groups 70,167,474
Pools and Associations 148,380,635
Total Premiums Written $32,126,944,829
In March 2005, the Life and Health Division prepared a report that was submitted to the Governor and General Assembly regarding the Commissioner’s responsibilities concerning managed care organizations. This report included a summary of quality assurance plans, potential modifications to the consumer report card, market conduct activity, a summary of complaints filed with the Department, a summary of violations, and a summary of issues discussed regarding managed care at public forums. In June 2005, the Division reported to the Governor and General Assembly that no managed care organizations failed to file any data as required by Public Act 97-99 and Public Act 99-177.
The following information is provided in accordance with Conn. Gen. Stat. § 38a-13:
During Fiscal Year 2004-2005, the Insurance Commissioner served as the receiver of five domestic insurance companies: three property and casualty insurers, one life and health insurer, and one health care center. In addition, the Insurance Commissioner served as ancillary receiver of two property and casualty insurers domiciled in Massachusetts.
The Connecticut Surety Company -- The Insurance Commissioner was appointed Rehabilitator of The Connecticut Surety Company ("CSC”) by the Superior Court on February 6, 2002. CSC was a Connecticut domiciled surety company that issued commercial and contract surety and fidelity bonds. CSC’s principal offices were in Hartford, Connecticut and were licensed to transact the business of insurance in Connecticut and 25 other states and the District of Columbia. On May 17, 2002, the Superior Court entered an Order of Liquidation, which declared CSC insolvent and appointed the Insurance Commissioner Liquidator of CSC. The Liquidator was directed to take possession of the assets of CSC and to administer them under the supervision of the Superior Court. All policies and contracts of insurance or bonds issued by CSC were cancelled by the Liquidation Order. Promptly after the issuance of the Liquidation Order, the CSC Liquidator mailed notice of the Liquidation Order to all known creditors of CSC, together with a copy of a proof of claim and directions to file with the Liquidator any and all claims against CSC on or before November 15, 2002. On May 16, 2003, the Liquidator filed her First Report with the Superior Court and noted therein that approximately 1,094 proofs of claim were filed with the Liquidator and that the CSC balance sheet as of March 31, 2003 showed assets of $6,152,664.20 and liabilities of $14,675,211.20. CSC and its corporate affiliates operated as an integrated organization, sharing office space, personnel and cash management systems. As a result of the management and shareholders’ abandonment of CSC’s corporate parent, Connecticut Surety Corporation, and its corporate affiliates, the Liquidator determined that the affairs of CSC’s affiliated entities should be wound-up as part of the receivership proceedings of CSC. The CSC Affiliates consist of the following companies: The Connecticut Surety Company, Connecticut Surety Corporation, Connecticut Surety Insurance Agency, Inc., Funds Management, Inc., Connecticut Surety Insurance Agency of Arizona, Inc., Bonds II Surety Group, Inc., and Connecticut Surety Insurance Agency of Nevada, Inc., (collectively, the “CSC Affiliates”). On May 29, 2003, the Superior Court granted the Liquidator’s Motion for Substantive Consolidation of CSC and its affiliates and entered an Order for Substantive Consolidation, which joined the CSC Affiliates in the pending liquidation proceedings. The Order for Substantive Consolidation directed the Liquidator to take possession of the assets of each of the CSC Affiliates and to administer the assets jointly along with the assets of CSC under the supervision of the Superior Court. The Liquidator promptly gave notice to persons interested in the CSC Affiliates of the Order for Substantive Consolidation and August 29, 2003 deadline for the filing of claims against the estates of the CSC Affiliates. On May 18, 2005, the Liquidator filed her Third Report with the Superior Court detailing the status of the liquidation proceedings. As of May 10, 2005, approximately 1,223 proofs of claim of various classes of claims were filed with the Liquidator. The consolidated balance sheet of CSC and the CSC Affiliates as of March 31, 2005 shows a deficiency of assets over liabilities of $14,699,702.83, with total assets of $6,961,819.75 and total liabilities of $21,661,522.58. The Department's web site (http://www.ct.gov/cid) continues as a source for news and information regarding the liquidation of CSC and the CSC Affiliates.
Covenant Mutual Insurance Company -- The Insurance Commissioner was appointed Rehabilitator of Covenant Mutual Insurance Company ("Covenant") on March 1, 1993. Covenant was a Connecticut domiciled insurer established in 1831 and was licensed to do business in 31 states. On May 4, 1994, the Superior Court entered an Order (“Confirmation Order”) confirming a Plan of Rehabilitation of Covenant. The Confirmation Order, among other things, (i) confirmed the Covenant Plan of Rehabilitation (“Plan”), (ii) declared Covenant insolvent as of the date of the Confirmation Order, (iii) directed that the assets and liabilities comprising Covenant’s estate be liquidated as provided in the Plan; and, (iv) established a December 31, 1994 Bar Date for the filing of claims against the Covenant estate. On December 29, 2004, the Trustee filed her Report with the Superior Court. As reflected in the Report, the June 30, 2004 balance sheet of the Covenant Mutual Liquidation Trust shows a deficiency of assets over liabilities of $9,219,995.25, with total assets of $13,697,152.47 and total liabilities of $22,917,147.72.
First Connecticut Life Insurance Company -- The Insurance Commissioner was appointed Rehabilitator of First Connecticut Life Insurance Company (“FCLIC”) by the Connecticut Superior Court on April 2, 1996. FCLIC was based in Torrington, Connecticut and commenced business in 1991. FCLIC was licensed only in Connecticut, and immediately prior to its rehabilitation proceedings, offered health, dental, short-term disability, Medicare excess, major medical and prescription drug benefits to employer groups or multiple employer trusts. On May 23, 1996, at the request of the Rehabilitator, the Superior Court ordered that FCLIC be placed in liquidation. In doing so, the Court further ordered that any and all claims against FCLIC be presented to the Liquidator on or before December 31, 1996, in order to share in the distribution of the assets of FCLIC. Of the 351 proofs of claim filed with the Liquidator prior to the claim bar date, 234 claims were filed by FCLIC policyholders. The Connecticut Life and Health Insurance Guaranty Association (“CLHIGA”) has paid all but a few of these claims, and those that have been denied by CLHIGA, were denied on the basis that they were not covered by FCLIC’s policies. On July 22, 2002, the Liquidator and Arthur Andersen LLP (“Andersen”) entered into a Settlement Agreement, which resolved the claims between the Liquidator and Andersen and disposed of two lawsuits initiated by the Liquidator. The first lawsuit alleged certain claims against Andersen arising in connection of Andersen’s audits of the financial statements of FCLIC for the years 1992, 1993 and 1994. The second lawsuit alleged that certain payments by FCLIC to Andersen were impermissible preferential payments. Pursuant to the Settlement Agreement, Andersen, without admitting any liability or wrongdoing, paid $2,000,000 to the Liquidator and the Liquidator caused the lawsuits to be dismissed with prejudice. On July 30, 2003, the Superior Court entered an Order approving: (a) a compromise of a claim; (b) the Liquidator’s claims report and distribution to creditors; and (c) the procedures for any remaining administrative claims. In December 2004, the FCLIC Liquidator paid CLHIGA $6,049,138.97 as a creditor of the FCLIC estate. The payment to CLHIGA was in addition to early access funds FCLIC distributed to CLHIGA in 1996 totaling $8,125,000. The distributions from the FCLIC estate to CLHIGA made possible a refund by CLHIGA of 69.3% of assessments paid by its member insurers for the FCLIC insolvency. On December 15, 2004, the Superior Court entered an Order approving the closure of the FCLIC Liquidation Proceedings, including approving the dissolution of FCLIC, destruction of records, discharge of the Liquidator and the issuance of injunctions. On June 27, 2005, the FCLIC Liquidator executed and filed with the Superior Court a Certificate of Discharge and Closure of the Liquidation Proceedings.
Westbrook Insurance Company -- On July 17, 1997, the Superior Court appointed the Insurance Commissioner Rehabilitator of Westbrook Insurance Company (“Westbrook”), a Connecticut domiciled property and casualty insurance company which had its principal office in Wallingford, Connecticut. Westbrook was incorporated in 1994 and licensed only in Connecticut; it underwrote direct insurance and reinsurance on auto liability and auto physical damage risks. Westbrook is a wholly owned subsidiary of Home State Holdings, Inc. (“HSH”) and part of an affiliated group of property casualty insurance companies (the “Home State Group”) domiciled in the states of New York, New Jersey, Pennsylvania, and Georgia. The Rehabilitator determined that it was in the best interest of policyholders, creditors, and the public to sell Westbrook’s ongoing business and transfer Westbrook’s claim handling functions to financially reliable parties. Accordingly, the Rehabilitator entered into a Policy Acquisition Agreement and a Reinsurance Agreement dated as of August 15, 1997 with Eagle Insurance Company (“Eagle”), whereby Eagle assumed all of the obligations of Westbrook under all direct policies issued by Westbrook for losses with dates of accidents on and after August 15, 1997. In order to ensure the continued handling of claims on Westbrook policies arising out of accidents prior to August 15, 1997, the Rehabilitator entered into a Claims Service Agreement dated August 15, 1997 with Material Damage Adjustment Corp.(“MDA”), an affiliate of Eagle. During this period, the Rehabilitator arranged for Westbrook to transfer to First Security Insurance Company of Hartford performance of all services it provided to the company as its reinsurer of certain commercial auto business, including the collection of premium and the adjustment and payment of claims. On October 26, 1998, the Superior Court granted the petition of the Rehabilitator and ordered that Westbrook be placed into liquidation and appointed the Insurance Commissioner Liquidator of Westbrook. The claim bar date set by the Court for filing proofs of claim was January 31, 1999. The Receiver filed with the Superior Court her Seventh Accounting on November 12, 2002. On August 20, 2002, the Liquidator made a distribution of the estate in the amount of $1,058,071.10 to claimants whose claims have been previously allowed by the Court. The amount distributed to each claimant was equal to 100% of the allowed amount of each claimant’s claim falling within Class 1 through Class 5 and 75% of the allowed amount of any claim 6 claim. On February 27, 2003, the Superior Court issued an order approving (A) the Liquidator’s claims report and final distributions to creditors, (B) establishment of reserves, (C) administrative claim procedures, and (D) procedures for the retention and/or destruction of records. Pursuant to this Order, Class 6 claimants receive the remainder of their allowed claims in full, the Class 7 claim is paid in full and Class 8 claims receive pro rata distributions in accordance with their allowed amounts, if all preceding classes have been paid in full. On July 2, 2003, the Liquidator obtained a release from the United States of America from any liability for federal claims pursuant to 31 U.S.C. § 3713(b). On or about November 18, 2003, the Liquidator made a second distribution to the creditors of Westbrook with unpaid claims in the total amount of $3,646,486.62 which, together with the amounts distributed in 2002, represented payment of 100% of their allowed claims. On or about December 14, 2004, the Liquidator made a third distribution to creditors in the total amount of $525,032.22 representing interest on their claims filed against the Westbrook estate. On April 5, 2005, the Liquidator executed a Quitclaim Assignment in favor of Home State Insurance Company in Liquidation, whereby certain amounts receivable from Westbrook reinsurers are transferred to Home State in satisfaction of its claim against Westbrook. On May 11, 2005, the Superior Court, upon motion of the Liquidator, entered an Order Approving Closure of the Westbrook Liquidation Proceedings which approved the dissolution of Westbrook, approving the procedures for remaining administrative claims, authorizing disposition of unclaimed and withheld funds, discharging the Liquidator, enjoining actions against Westbrook, the estate and the Liquidator, closing the liquidation, and authorizing the Liquidator to make such filings and take such other action as she may deem appropriate to conclude the liquidation proceeding.
Suburban Health Plan, Inc. -- On May 20, 1999, the Superior Court entered a Stipulated Order of Liquidation declaring Suburban Health Plan, Inc. (“Suburban”) to be insolvent and appointed the Insurance Commissioner Liquidator of Suburban. Suburban was an HMO based in Shelton, Connecticut which served more than 8,000 members, and was an affiliate of Griffin Hospital in Derby, Connecticut. On May 12, 2004, the Superior Court entered an Order approving the Liquidator’s claims report, distributions to creditors, and other relief that will permit the Liquidator to substantially complete the administration of the estate. The Order: allowed approximately 2,400 claims filed by participating providers and individuals that had paid participating providers; permitted the Liquidator to make a distribution to those creditors based on the priorities established by Conn. Gen. Stat. § 38a-944; authorized a compromise of claims with the United States, which had asserted a claim in connection with a payment it had made to a provider under Medicare; allowed a claim by the Insurance Department as an expense of administration; authorized the Liquidator to offer participating providers an enhanced distribution from the estate if they were willing to agree to release any claims they might have against enrollees; and entered injunctions that prohibit participating providers that accept an enhanced distribution from pursuing any enrollees of Suburban. On September 9, 2004, the Superior Court approved the Liquidator’s Fifth Accounting and Status Report. On April 20, 2005, the Superior Court entered an Order disallowing the claim of Greenwich Hospital. The Liquidator has made final distributions to all of the creditors of Suburban. On June 9, 2005, the Liquidator filed a motion with the Superior Court for the entry of an order enabling the closure of the Suburban liquidation proceedings. The Liquidator’s Motion was pending at the end of Fiscal Year 2004-2005. The Liquidator expects to effectuate the closure of the Suburban estate within the year.
On April 26, 1989, the Insurance Commissioner was appointed ancillary receiver of American Mutual Liability Insurance Company (AMLICO) and American Mutual Insurance Company of Boston (AMI), were both domiciled in Massachusetts and placed in liquidation on March 9, 1989. The ancillary receiver has distributed assets from the AMLICO and AMI receivership estates to the Connecticut Insurance Guaranty Association (“CIGA”) in the total amount of $20,000,000 and $4,000,000, respectively, as early access distributions for the administrative expenses, claims and claims handling expenses CIGA had incurred for covered policy obligations in connection with the AMLICO and AMI insolvencies. By letter dated September 22, 1989, the United States Department of Justice gave notice to the Ancillary Receiver that the United States, its departments, agencies, and instrumentalities assert priority status pursuant to 31 U.S.C. § 3713 with regard to the debts due it from AMI and AMLICO (“the Federal Priority Statute”). On October 4, 2002, the Ancillary Receiver filed with the Superior Court her Plan of Liquidation of Connecticut Assets of AMLICO and AMI (the “Plan”). The Plan provides for the payment of the expenses of administering the companies’ estates and also provides for the payment of claims by policyholders that are Connecticut residents or claims by claimants against policyholders that are Connecticut residents. The Plan also provides for the payment of the claims and loss adjustment expenses of the two Connecticut insurance guaranty associations. The Plan further provides that after the payment of the foregoing claims and the establishment of reserves for disputed claims and administrative expenses, all remaining funds are to be transferred to the Massachusetts domiciliary receiver. The Superior the Court entered an order approving the Plan on November 21, 2002 and subsequently entered an order authorizing the payment of certain allowed Class 2 claims under and pursuant to the Plan. These claims, totaled $805,225.03 and $142,098.53 for AMLICO and AMI, respectively, and were paid by the Ancillary Receiver on April 30, 2003. On May 9, 2003, the Ancillary filed with the Superior Court her Second Motion for Disallowance and Allowance of Claims. On November 5, 2003, the Ancillary Receiver signed an agreement with the Permanent Receiver and CIGA which establishes a procedure by which to resolve CIGA’s remaining claims against the AMLICO and AMI Connecticut ancillary receiverships in order to facilitate the closure of the receiverships. On January 28, 2004 the Superior Court entered an Order allowing a Class 2 claim in the amount of $1,600. On January 28, 2005, the Ancillary Receiver and the U.S. Department of Justice entered into a Release Agreement to withdraw the United States’ 1989 priority claim asserted against all assets of the AMLICO and AMI ancillary receivership estates with respect to debts that may be owed to the United States, its departments, agencies, and instrumentalities, thereby permitting the distribution of ancillary receivership assets to creditors. On March 29, 2005, the Connecticut Ancillary executed a transfer agreement between her and the Massachusetts Permanent Receiver of AMLICO and AMI, whereby the Permanent Receiver will to indemnify, hold harmless and defend the Ancillary Receiver from all liabilities and claims, thereby allowing the distribution of the residual assets of AMLICO and AMI to the Permanent Receiver. On May 9, 2005, the Ancillary Receiver paid the Connecticut Life and Health Insurance Guaranty Association $138,996.09 in final settlement of its claims against the AMLICO and AMI ancillary receivership estates. On May 11, 2005, the Superior Court, upon motion of the Ancillary Receiver, entered an order enabling closure of the AMLICO and AMI ancillary receivership proceedings. The Superior Court order approved the agreement with CIGA and authorized the transfer of $5,737,500 from the AMLICO ancillary receivership estate and $1,012,500 from the AMI ancillary receivership estate to the escrow established in the CIGA agreement for the payment of CIGA’s remaining claims against the ancillary receivership estates. The order also authorized disposition of the Ancillary Receiver’s records, authorized the Ancillary to take other administrative action to close the ancillary receivership estates, and other requested relief. As of June 30, 2005, the AMLICO and AMI ancillary receiverships had assets of $22,954,285.07 and $2,162,667.80, respectively. The Liquidator expects to effectuate the closure of the AMLICO and AMI ancillary receiverships during calendar year 2005.