Lumbermens Mutual Casualty, American Manufacturers Mutual Insurance and American Motorists Insurance placed in liquidation

State insurance guaranty associations to pay covered claims of the companies

[May 13, 2013]  CHICAGO -- Illinois Department of Insurance Director Andrew Boron announced Friday that orders of liquidation with findings of insolvency against Lumbermens Mutual Casualty Co., American Manufacturers Mutual Insurance Co. and American Motorists Insurance Co. were entered by the Circuit Court of Cook County. Boron asked for the entry of the liquidation orders in his verified complaint filed by Illinois Attorney General Lisa Madigan. The liquidations were effective May 10.

Boron has been serving as statutory rehabilitator of the companies since July of 2012.

"Liquidation was the next step in this process," Boron said. "Department of Insurance staff has worked diligently during this transition with interest to the companies' creditors and customers."

The court also entered an order granting his motion for substantive consolidation of the liabilities and assets of the liquidation estates of Lumbermens, American Manufacturers and American Motorists. This order will allow for the equitable distribution of assets on the claims arising in the liquidation proceedings of these three companies.

The liquidation orders have triggered the obligations of the state insurance guaranty associations to begin paying covered claims obligations of the companies. In preparation for the liquidation of the companies, Boron has been working with the National Organization of Life and Health Guaranty Associations and the National Conference of Insurance Guaranty Funds to plan the orderly transition of claim administration responsibilities to the state insurance guaranty associations.

Assisting Boron in the administration of the liquidations is the Office of the Special Deputy Receiver, 222 Merchandise Mart Plaza, Suite 1450, Chicago, IL 60654.

Lumbermens, a mutual property and casualty insurer organized in 1912, held licenses in 49 states and the District of Columbia. American Manufacturers, a mutual property and casualty insurer organized in 1837, held licenses in 49 states and the District of Columbia. American Manufacturers, a member of LMG, was organized in 1926 and held licenses in 49 states. Lumbermens, American Manufacturers and American Motorists commenced a voluntary runoff in 2003 and have been operating under a runoff plan filed with and approved by Department of Insurance in 2004.

A copy of the liquidation orders is available at www.osdchi.com or by calling 847-320-2711.

[Text from Illinois Department of Insurance file received from the Illinois Office of Communication and Information]