Penn Treaty Network America Insurance Company and a sister company are still operating in rehabilitation, and the chairman of the companies’ boards is still skirmishing in court with the rehabilitator.
The latest battle is over whether the rehabilitator — Pennsylvania Insurance Commissioner Michael Consedine — should get to create a policyholder comittee.
Penn Treaty helped create the modern long-term care insurance (LTCI) market. Regulators took it over after deciding that LTCI sales at Penn Treaty and the sister company, American Network Insurance Company, were outstripping growth in assets.
Consedine is asking a Pennsylvania state judge, Mary Leavitt, for permission to create the policyholder committee, to represent the policyholders in court proceedings related to the consideration of rehabilitation plans for Penn Treaty and American Network.
Consedine would appoint Ronald Schiller to be the interim counsel for the committee, with Schiller’s fees to be paid from the companies’ assets.
Eugene Woznicki, the chairman of Penn Treaty, American Network, and the insurance companies’ holding company, Penn Treaty American Corp., and William Hunt, the companies’ former chief executive officer, have intervened in the rehabilitation proceedings and have kept Pennsylvania regulators from putting Penn Treaty and American Network in liquidation.
Consedine has been consulting with Woznicki and Hunt — the “intervenors” – about developing a rehabilitation plan, but not the policyholders, even though the policyholders rank higher in terms of priority than Woznicki and Hunt, Consedine told the court in an application for permission to start a policyholder committee.
”The presence of intervenors, board members and consultants at the negotiating table, without the policyholders also being formally represented, results in an approach to the development of a plan that the public could view as unbalanced and effectively excluding the direct input of policyholders,” Consedine said.
Woznicki said Leavitt should deny the policyholder committee application.