The Missouri Department of Insurance has announced it is "closing the books" on the Commonwealth General Insurance Co. receivership after paying trucker claimants and creditors. The department also is returning almost $200,000 to its original owners.
"This unusual surplus in an insurance company insolvency speaks to how quickly the department identified the firm's original financial problems and the sound management of the receivership," said MDI Director Scott B. Lakin.
Kansas City, MO-based Commonwealth General and its subsidiary, Health of America Fire and Casualty Co., had insured long-haul truckers since 1986. Commonwealth General "reinsured 100 percent of all policies written by Heart of America."
By the end of 1992, neither company met the minimum capital and surplus requirements to do business in Missouri and were placed in rehabilitation by a Jackson County circuit judge. In 1994, MDI sold off Heart of America in a competitive bidding process and recovered more than $1 million for its licenses in several states and other assets.
In 1995, the court ordered MDI to liquidate Commonwealth General. "Guaranty funds in 18 states protected the interests of policyholders that filed more than 500 claims against Commonwealth General, but the insurer's assets eventually yielded enough funds to pay off all claims," Lakin said.
Since 1995, the receivership "collected $7.7 million - including $200,000 in earned premium from former agents - and paid off $11.8 million to policyholders, guaranty funds and general creditors."
This past June, the receivership paid the remaining 27 shareholders of Commonwealth General $192,748. After final expenses are paid, it reportedly will turn over another $5,078.