Newspaper article THE JOURNAL RECORD

Judge Stays Crawford's Universal Oversight Bid

Newspaper article THE JOURNAL RECORD

Judge Stays Crawford's Universal Oversight Bid

Article excerpt

Oklahoma Insurance Commissioner John Crawford's supervision of Duncan-based Universal Fidelity Life Insurance has been stayed by Oklahoma District Court Judge Daniel L. Owens.

Owens determined Friday that the Oklahoma Insurance Department's supervision, which required Universal Fidelity to obtain prior written approval in order to convey any assets, was onerous.

"I have trouble with any regulatory agency being able to walk into a company and taking it over and then saying, well, you have a right to come back later and complain about it," Owens said. But Orval Jones, general counsel for the department, said the judge's decision was "erroneous." "The record fully supported our decision" for the supervisory order, Jones said. "The judge didn't articulate a reason for his decision." In August, Crawford entered an order of supervision of the insurance company charging that Carmel, Ind.-based Conseco took control of the business without prior approval from the department, as required by law. Universal Fidelity, which had revenues in 1996 of $38.5 million and net income of more than $1 million, was acquired last year by Pioneer Financial Services, which itself was acquired by Conseco earlier this year. About 90 percent of Universal Fidelity's policies are Medicare supplement coverage. Before the Pioneer acquisition, the company had roughly 200 agents and 70 employees. Since then, Universal Fidelity has terminated about 90 percent of its agents and six employees. But the state insurance department is not challenging Universal Fidelity's financial strength. "Our concern is that while the balance sheet looks fine, a company called Conseco has obtained control of the company without the proper authority," Jones said. Conseco has $33 billion in assets and targets baby boomers in marketing its products -- life insurance, annuities and supplemental health insurance. The company has 150,000 independent and carrier agents. In March, Conseco submitted a Form A to the insurance department to acquire control of Universal Fidelity. Crawford subsequently denied the request and issued an order of supervision of the company in August after the department concluded that Universal Fidelity was unlawfully conducting business under the control of Conseco. …

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