Members to receive share of $13 million receivership from defunct Members Mutual Insurance Co.

<p>AUSTIN, Texas – Roughly 66,000 former policyholders of Members Mutual Insurance Co., a firm that provided insurance to credit union members, will receive their share of a $13.8 million sum in receivership. A district court placed the now-defunct property and casualty insurer in receivership when it closed down in 1992 after incurring losses. Each policyholder located will receive a check for $209.50 from the total receivership sum. Members Mutual owned and operated Members Service Insurance Co. and Members Insurance Co., which also were shut down although not individually insolvent. The special deputy receiver was able to pay all claims and other obligations of those two companies from their own funds, said Commissioner Jose Montemayor of the Texas Department of Insurance. Their remaining assets became the property of Members Mutual, the sole stockholder of the two companies. The court determined that the assets left over after all obligations had been paid should be distributed to Members Mutual’s policyholders who had policies in effect between Jan. 1,1991 and Sept. 30, 1992. The insurer stopped renewing policies in 1991. “Receiverships are never pleasant. However, I’m very pleased that a combination of circumstances, including good stewardship by the special deputy receiver, is putting money back in the hands of people who paid premiums to Members Mutual,” Montemayor said. The $13.8 million sum is the largest distribution of surplus company funds on record from a court-ordered Texas receivership of an insolvent company, according to the Texas Department of Insurance. An insurance guaranty association generally pays claims but in the case of Members Mutual, the receiver reimbursed the Texas Property and Casualty Insurance Guaranty Association for all the claims it paid. Policyholders had until Feb. 28 to cash or deposit their checks. If checks were not cashed or deposited by the end of that day, the check would no longer be valid and claimants must go through the process of making a claim for the unclaimed checks. At press time, 14,000 policyholders had not cashed or deposited their checks, according to the Texas Department of Insurance. Last summer, the Texas Credit Union League informed credit unions that the receiver was looking for policyholders. The league also published reminders of check availability earlier this year alerting credit unions that the checks may be mistaken for advertisements because there was no identification of what the check was for. -</p> <p>[email protected]</p>