Insurance News

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November 17, 2011

Missouri insurance regulators put small life insurance plan into receivership

Dexter-based association sold coverage for funerals

Jefferson City, Mo. - A judge has placed a small, Dexter-based life insurance company into rehabilitation and turned it over to the Missouri Department of Insurance. Department Director John M. Huff was named receiver of Watkins Life and Benefit Association, which allows the department to take over operations of the company. Because of its financial condition, the company's board of directors consented to the rehabilitation order.

With about 2,000 policyholders, Watkins is licensed to do business only in Missouri. With premium sales of just $45,000 in 2010, Watkins is one of the smallest of Missouri's approximately 400 licensed life insurance companies. With the company in rehabilitation, the department's priority will be to process existing claims and uphold commitments to policyholders.

Huff says policyholders of the company should continue to pay their premiums, also referred to as assessments, to keep their coverage intact. These payments should be mailed to:

Receivership Supervisor
Room 530
PO Box 690
Jefferson City, MO 65101

The department's website has more information about the receivership.

"This small company was formed sixty years ago mainly to provide insurance coverage for funeral contracts," said Huff. "Unlike most life insurance companies, Watkins is an assessment plan formed by a mechanism that is no longer allowed under Missouri law."

Rehabilitation is a legal step taken by the court to protect policyholders by preserving a company's assets. The department as the rehabilitator assumes management of the company, attempts to correct existing problems, continues operations, maintains policyholder accounting and develops a plan of rehabilitation or petitions the court for liquidation. 

Those with questions can call the Missouri Department of Insurance Consumer Hotline at 800-726-7390 or contact the department online at insurance.mo.gov

About the Missouri Department of Insurance, Financial Institutions & Professional Registration

The Missouri Department of Insurance, Financial Institutions and Professional Registration (DIFP) is responsible for consumer protection through the regulation of financial industries and professionals. The department's seven divisions work to enforce state regulations both efficiently and effectively while encouraging a competitive environment for industries and professions to ensure consumers have access to quality products.

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