Information on Legion and Villanova Insurance Companies _________________________________________________________

Legion Insurance Company and Villanova Insurance Company were declared insolvent by the 200th Judicial District Court of Travis County, Texas on October 23, 2002. By Official Orders dated October 25, 2002, these companies were designated as impaired insurers by the Commissioner of Insurance for the State of Texas. Copies of these orders are available here for Legion and Villanova. The designation of impairment triggers TPCIGA’s duties to pay covered claims by and against Texas policyholders of Legion and Villanova.

Important information regarding current policyholders. If you have an in-force policy issued by Legion or Villanova, please note that by law, the Guaranty Association cannot pay claims under those policies that occur after November 24, 2002, even if the policy remains in force at that time. This is because the Guaranty Act permits TPCIGA to pay only those claims that arise prior to the designation of impairment or within thirty days after impairment. We do not have any information at this time as to when policies may be cancelled by the Receiver. If you have questions about insurance coverage under your Legion or Villanova policy and the effect of these events on your coverage, you should contact your insurance agent or broker.

Information regarding pending claims: Legion and Villanova processed claims through a number of third-party claims administrators. TPCIGA is in the process of obtaining the claim files from these entities. This may take several weeks or even months. As we receive the claim files, they will be assigned to adjusters for further handling. TPCIGA will then make contact with the claimants and insureds to advise them of their rights under the Guaranty Act and request further information necessary to process their claim. We appreciate your patience in this transitional period.

For information about limitations on TPCIGA’s payment of claims, including statutory offsets and caps on payments, please refer to Art. 21.28-C of the Texas Insurance Code and to our FAQs. Generally, claim payments are capped at the lesser of policy limits or $300,000, although worker’s compensation claims are not subject to a cap. Please note that certain types of claims are not payable by the TPCIGA, including claims by an insurer (e.g. for subrogation or contribution), and those arising under warranty or surety bonds. Claims arising from life, accident or disability insurance are not covered by TPCIGA but may be covered by the Texas Life, Accident, Health and Hospital Service Insurance Guaranty Association.

Pending litigation: The designation of impairment triggers an automatic six month stay of all pending litigation in which these insurers were a party or were obligated to defend a party, pursuant to sec. 17 of Art. 21.28-C of the Texas Insurance Code. The stay will be in effect until April 25, 2003. Attorneys representing the insurers or their insureds will be instructed to file a notice of automatic stay with the court in each such case. A form Notice of Stay is available here in Microsoft Word document format for Legion and Villanova. The stay is mandatory, and applies to the entire case, not just to the insureds of Legion and Villanova. Deadlines pending under the Rules of Civil Procedure or Rules of Appellate Procedure are tolled during the stay.

Unearned Premium: Claims for unearned premium will be processed by TPCIGA as soon as we have obtained necessary financial data from the Receiver. Receipt of this information usually takes at least six months from the date of receivership; however, because the in-force policies have not yet been cancelled, it is likely that unearned premium information will be further delayed. Claims for unearned premium are capped at $25,000.

Unfunded Settlements: If you reached a settlement with Legion or Villanova but did not receive payment prior to receivership, please note that TPCIGA is required to review all such settlements, including those reached through mediation, and is not bound by their terms. Proposed settlements will be reviewed as soon as possible after we have received the company’s claim files.

Additional information can be found in our FAQs and by referring to Art. 21.28-C of the Texas Insurance Code.