Eight years of legal tussles have ended in a court order to liquidate Penn Treaty Network and its affiliate American Network Insurance of Pennsylvania.
Commonwealth court judge Hannah Leavitt has ordered a plan to liquidate the company and have a guaranty, to be footed by the public, cover the continuing claims against policies underwritten by the insurer.
Ron Ruman, Pennsylvania Insurance Department spokesperson, said in a report by The Inquirer that the guaranty funds will cover $3.3 billion of costs. The companies have about 76,000 policyholders nationwide.
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“Anyone who has a policy should continue paying,” Ruman said in the report, explaining that clients with active policies can still file claims and collect.
Meanwhile, Penn Treaty’s remaining assets are set to cover the remaining $500 million in projected costs. The company was declared insolvent in 2009 and was placed under a rehabilitation program following the death of founder Irving Levit.
National Organization of Life and Health Guaranty Associations data claims that this is the largest health insurance company failure in recent US history.
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