Reciprocal Of America and The Reciprocal Group,
In Receivership For Liquidation

Initiation Of Receivership Proceedings And Appointment Of Deputy Receiver


When and why were Reciprocal of America ("ROA") and The Reciprocal Group ("TRG") (collectively, the "Companies") placed into receivership?


The Companies were placed into receivership on January 29, 2003, when the Circuit Court of the City of Richmond, Virginia (the "Court"), issued its Final Order Appointing Receiver for Rehabilitation or Liquidation (the "Receivership Order"). The Court determined that receivership was necessary because any further transaction of the Companies business would be hazardous to their policyholders, subscribers, members, creditors, and the public.


Who is now in charge of the business and affairs of the Companies?


The Receivership Order named the State Corporation Commission of the Commonwealth of Virginia (the "Commission") as Receiver, and Alfred W. Gross, Commissioner of Insurance, as Deputy Receiver of the Companies. As authorized by the Receiver, Mr. Gross, in his capacity as Deputy Receiver, is in control of the Companies and administers the affairs of the Companies. Michael R. Parker, who succeeded Melvin J. Dillon as the Special Deputy Receiver, manages the day-to-day affairs of the Companies. Mr. Parker was appointed as Special Deputy Receiver by the Seventh Directive of the Deputy Receiver Appointing Special Deputy Receiver effective June 1, 2005.


Does the Deputy Receiver issue directives as part of his administration of the Companies?


Yes. The Deputy Receiver issues directives in order to effectuate policies to allow for his administration of the Companies. The following directives have been issued:

First Directive Continuing Insurance Policy Payments and Imposing Suspension and Moratorium on Other Claim Payments (effective date: 1/29/03)

Second Directive Imposing Moratorium on New Business (effective date: 1/29/03)

Third Directive of Deputy Receiver Adopting Receivership Appeal Procedure (effective date: 1/29/03)

Fourth Directive of Deputy Receiver Terminating Agents and Agent Compensation (effective date: 2/23/03)

Fifth Directive Regarding a Discontinuance of Policy Payments and Discontinuance of Other Claim Payments (effective date: 4/30/03)

Sixth Directive of Deputy Receiver Adopting Amended Receivership Appeal Procedure (effective date: 11/10/04)

Seventh Directive of Deputy Receiver Appointing Special Deputy Receiver (effective date: 6/1/05)

Eighth Directive Regarding Claim Payments (effective date: 1/13/06)

Each directive is discussed in detail in the applicable section of the Frequently Asked Questions.