The Kentucky Office of Insurance says the estate of a failed life insurance company has distributed $40 million to former producers and other company creditors.
Kentucky regulators assumed control of the company, Kentucky Central Life Insurance Company, Lexington, Ky., in 1993 and liquidated the company in 1994.
Regulators placed the company in rehabilitation and transferred the company’s in-force policies to Jefferson-Pilot Life Insurance Company, a unit of Jefferson-Pilot Corp., Greensboro, N.C., which is now part of Lincoln National Corp., Philadelphia.
The recent distribution from the Kentucky Central Life estate includes $9 million in deferred compensation for about 650 former Kentucky Central agents, Kentucky officials say.
The distribution also includes $16.5 million for state guaranty associations; $13.9 million for obligations associated with an office building mortgage and the Lexington Festival Market development; and $1.1 million for 50 other unsecured creditors.
The Kentucky Central Life estate is preparing to reimburse Jefferson-Pilot for amounts owed to former policyholders of Kentucky Central Life for items such as additional expense charges and lower crediting rates on their account balances, Kentucky officials say.
The reimbursement will help make Kentucky Central Life policyholders whole for limitations placed on the policies when Kentucky Central Life was placed in rehabilitation and for the 5-year period after the policies were transferred to Jefferson-Pilot, officials say.