October 20, 2009

In prior postings I have described New York’s five (5) insurance security/guaranty funds: three non-life security funds administered by the superintendent of insurance (the property/casualty fund, the workers comp fund and the public motor vehicle liability fund); and two life funds. The Life Insurance Company Guaranty Corporation, a separate entity with its own Board of life industry representatives, administers the guaranty fund protecting current life and annuity policies. There is also a life guaranty fund covering pre-1983 policies that still remains extant. (Part III of my series of articles on the receivership process in New York, posted October 9, 2008, describes in detail the operation of and reporting requirements for these funds).

The P/C Security Funds

The p/c insurance security funds are accounts funded through industry assessments, with the commissioner of taxation and finance as custodian, and with the control of the funds vested with the superintendent as receiver. Although there is no detailed reporting by any of these funds or the superintendent, I have accumulated certain information over the years on the distributions from and recoveries to the funds on an estate-by-estate basis.
Following are schedules of the ten estates that have received the greatest amount of payments from the three p/c funds on a net basis (distributions less recoveries) for the past 11 years for the p/c fund and the past 7 years for the motor vehicle and w/c funds:


COMPANY ———————— COST TO FUND —— % of Total

Reliance Ins Co ——————— $315,954,788 ——- 27.09%
Group Council Mutual Ins Co —- $200,954,041 ——- 17.23%
First Central Ins Co —————– $117,736,140 ——- 10.10%
Legion Insurance Co —————- $88,451,306 ——– 7.58%
Transtate Ins Co ——————— $78,139,954 ——— 6.70%
Villanova Insurance Co ————- $73,655,030 ——– 6.32%
American Agents Insurance Co —- $51,956,695 ——— 4.46%
Galaxy Insurance Company ——– $28,211,496 ——— 2.42%
Home Mut. Ins of Binghampton — $28,183,527 ——– 2.42%
Union Indemnity Ins of NY ——– $26,526,835 ——— 2.27%

TOTALS ————————— $1,166,156,055 —— 100.00%


COMPANY ———————– COST TO FUND ——- % of Total

NY Merchant Bakers Ins. Co —— $47,211,782 ——– 49.95%
Capital Mutual Ins Co ————– $27,173,134 ——– 28.75%
Reliance Ins Co ——————— $10,969,398 ——– 11.61%
Legion Insurance Co —————- $3,972,573 ———- 4.20%
Acceleration National Ins Co ——- $3,690,371 ———- 3.90%
United Community Ins Co ———- $1,553,331 ———- 1.64%
Security Indemnity Ins. Co ———– $564,418 ———- 0.60%
Indemnity Insurance Co. ————- $469,670 ———- 0.50%
American Eagle Ins Co —————- $232,562 ———- 0.25%
Carriers Casualty Co ——————– $179,615 ———- 0.19%

TOTALS —————————— $94,517,565 ——- 100.00%


COMPANY ————————COST TO FUND —– % of Total

Reliance Ins Co ——————– $203,014,868 ——– 52.76%
Legion Insurance Co —————- $76,450,563 ——– 19.87%
Home Insurance Co —————- $34,006,976 ———- 8.84%
Fremont Indemnity Co ————- $14,632,437 ———- 3.80%
American Mut. Ins Co of Boston — $12,055,131 ———- 3.13%
American Mut. Liability Ins Co —- $10,636,047 ———- 2.76%
Realm National Insurance Co ——- $9,927,261 ———- 2.58%
Commercial Comp. Casualty Co —– $9,756,611 ———- 2.54%
First Central Ins Co ——————- $3,414,102 ———- 0.89%
Villanova Insurance Co ————— $3,004,611 ——— 0.78%

TOTALS —————————– $384,789,415 —— 100.00%

One caveat on recoveries: the department of taxation and finance keeps detailed records on payments from the security funds to each estate, but for some unexplained reason does not keep records of recoveries or payments to the funds from estates. The liquidation bureau has included a schedule of recoveries by estate as part of its annual report to the legislature. The 2008 schedule shows no repayments to any security fund from any estate, although the superintendent’s annual report states that $36 million was received from the Reliance estate and another $18 million from another source (Merchant Bankers) in 2008 that it were reimbursed to the security funds. These sums are not included in the charts above because they are not included in the bureau’s schedule of recoveries.

The Life Funds

Unlike the p/c funds, the superintendent does not include any information on the life funds in the annual report to the legislature, and there is no financial information included on the Life Insurance Company Guaranty Corporation web site (, which contains more disclaimers than useful information. Also, while I have successfully obtained information on the p/c funds from the department of taxation and finance and the insurance department under the freedom of information law (FOIL), no useful information is accessible on the life funds through FOIL or through the funds themselves.

As I have pointed out in the past, it is ironic that there is more information available on the p/c funds – controlled by the superintendent and his agents at the liquidation bureau — than is available on the industry administered life funds.

What do you think?

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