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

Tennessee Risk Retention Groups Joint Petition To The Commission

Question:

What entities comprise the "Tennessee Risk Retention Groups?"

Answer:

The Tennessee Risk Retention Groups are Doctors Insurance Reciprocal, American National Lawyers Insurance Reciprocal, and The Reciprocal Alliance, each a risk retention group in receivership.


Question:

Have the Tennessee Risk Retention Groups sought relief from the State Corporation Commission of the Commonwealth of Virginia (the "Commission")?

Answer:

Yes. On or about April 25, 2003, the Special Deputy Receivers for the Tennessee Risk Retention Groups (the "Tennessee SDRs") filed in the Commission a Joint Petition for Expedited Review of Claims and Deputy Receiver's Determination of Appeal (the "Joint Petition"), as well as a supporting brief. For details regarding the relief sought and other aspects of this proceeding, the legal files should be reviewed carefully.


Question:

Has the Commission granted any of the relief sought by the Tennessee SDRs Joint Petition?

Answer:

Shortly after the Deputy Receiver filed his Application for Orders Setting Hearing on Liquidation of ROA and TRG, Establishing Response Dates, Ordering Liquidation, Approving Claims Bar Dates, and Related Matters (the "Application") on April 30, 2003, advising the Commission that he had concluded, independently, that due to ROA's deep insolvency, claim payments (other than payments for workers' compensation medical and disability claims (collectively, "Disability Claims")) should be discontinued, the Commission entered a Scheduling Order and Temporary Injunction related to the Joint Petition. In that order, the Commission enjoined the Deputy Receiver from making any further payments to policyholders, subscribers, and third-party claimants, with the exception of Disability Claims, until further order of the State Corporation Commission of the Commonwealth of Virginia (the "Commission"). Although it issued the temporary injunction sought by the Tennessee SDRs, the Commission specifically declined to make any determination on the likelihood of the Tennessee SDRs success on the merits of its petition. Additionally, the temporary injunction was dissolved by order of the Commission on June 10, 2003. The Commission also ordered that the Fifth Directive Regarding a Discontinuance of Policy Payments and Discontinuance of Other Claim Payments not be revoked, canceled, or amended without notice.


Question:

What is the current status of the Joint Petition proceeding?

Answer:

The Deputy Receiver and the Receiver for the Tennessee Risk Retention Groups have entered into an Agreement to Stay Proceedings and Tolling Agreement (the "Tolling Agreement"). The Deputy Receiver sought the Commission's approval of the Tolling Agreement in his Application for Approval of Agreement to Stay Proceedings and Tolling Agreement (the "Tolling Agreement Application") filed on July 20, 2004.  On December 13, 2005, the Commission issued its Final Order which approved the Tolling Agreement subject to certain reporting requirements contained in that order.  For additional information on the Tolling Agreement Application, see the CLAIM PAYMENTS FROM THE RECEIVERSHIP ESTATE section of the Frequently Asked Questions.