Texas Regulator Moves Forward in Search for Former Policyholders Due $7 Million

AUSTIN, Texas – The Texas Department of Insurance is pressing on with its search to find the nearly 30,000 former policyholders who are due $7 million from a defunct insurance company that served credit union members. Members Mutual Insurance Co. owned and operated Members Service Insurance Co. and Members Insurance Co., which were also shut down although not individually insolvent. A special deputy receiver was able to pay all claims and other obligations of those two companies from their own funds, according to TDI. 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 policyholders who had policies in effect between Jan. 1, 1991 and Sept. 30, 1992. The insurer stopped renewing policies in 1991. As of this March, TDI has mailed out checks totaling $286,000 to 1,364 people, said Evelyn Jenkins, TDI director of liquidation oversight. Each check is worth $209.50. “We are committed to finding these people,” Jenkins said, adding that her staff has researched property records and search engines to find the check recipients. Many receiving checks so far were still in Texas and one recipient was found in China. In addition to Texas, Members Mutual operated in Arizona, Arkansas, California, Colorado, New Mexico and Oklahoma. As a courtesy, the Texas Credit Union League sent out notices in 2001 and 2002 alerting credit unions that the receiver was looking for former policyholders, Jenkins said even though TDI is not required by law to search for former policyholders and technically the funds can be moved over to an abandoned fund in the controller’s office this year, her staff will continue searching. “There is no hurry in abandoning these funds,” Jenkins said. “We’ve seen some real hardship cases – $209.50 may not sound like a lot of money but some people have been so grateful (because) it allowed them to buy groceries or buy Christmas gifts.” When TDI does find a person, an affidavit is mailed out and the person must sign it, have it notarized and provide proof that they lived at the address on file usually through an old bill to verify that there are the rightful heirs to the checks. Once they mail the affidavit back to TDI and all information is verified, a check is sent out. “In the very beginning, we did some newspaper ads and a couple of television stations picked up the story,” Jenkins said. “We got a flurry of people calling in but that has since dropped off.” In March 2002, TDI mailed out checks to 66,000 policyholders and about half – nearly 33,000 – were returned because the addresses were no longer valid ones. Persons with questions about the distribution should contact TDI’s Liquidation Oversight Division at 800-578-4677 ext. 4352. [email protected]