RECIPROCAL OF AMERICA AND
THE RECIPROCAL GROUP
  In Receivership for Liquidation  

 

     

SUSPENSION AND MORATORIUM ON OTHER CLAIM PAYMENTS

 

Question: Did the Deputy Receiver continue to pay all claims when the receivership began?
   
Answer: No. In his First Directive Continuing Insurance Policy Payments and Imposing Suspension and Moratorium on Other Claim Payments effective the same day the receivership began, January 29, 2003, the Deputy Receiver ordered a continuation of all payments to policyholders, subscribers, and third-party claimants whose claims arose under insurance policies issued by ROA (each an "Insurance Policy" and collectively "Insurance Policies"), and the continued payment of all administrative expenses and secured claims (to the extent of the security) owed by the Companies. However, the First Directive ordered a suspension and moratorium on the payment of all other claims of any nature against the Companies, including the payment of all creditor claims, which are subordinate to Insurance Policy claims.
   
Question: Did the Deputy Receiver continue to make payments to policyholders, subscribers, and third-party claimants under Insurance Policies?
   
Answer: No. The Deputy Receiver discontinued payments under Insurance Policies (except for workers’ compensation medical and disability payments) pursuant to his Fifth Directive Regarding a Discontinuance of Policy Payments and Discontinuance of Other Claim Payments effective April 30, 2003. Please refer to the CLAIM PAYMENTS FROM THE RECEIVERSHIP ESTATE section for more detailed information.