GAMHC Liquidation Process, Distributions FAQs
This document is intended as a plain English discussion of the liquidation process and does not create any contractual rights or override the plan of reorganization or any other official document of the GAMHC liquidation.
The latest news is available at the General American news page.
As a result of a liquidity crisis, General American Life Insurance Co. (GALIC) was placed under Missouri Department of Insurance (MDI) administrative supervision in August 1999. At that time, all parties agreed that the best solution was the sale of GALIC and its affiliates. Metropolitan Life Insurance Co. (MetLife) purchased the companies from the parent, General American Mutual Holding Co. (GAMHC), for $1.2 billion on Jan. 6, 2000. MDI administrative supervision ended at that time.
All sale proceeds plus interest income (less any administrative costs, taxes and settlements from litigation or legal claims stemming from the sale) will be distributed to eligible members who were the owners by law of GAMHC and its subsidiary, General American Life, on Jan. 5, 2000.
Under Missouri law, the statutory liquidator -- the director of the Department of Insurance -- implements this distribution under the supervision of Cole County Circuit Court Thomas J. Brown. The court case is called Finke v. GAMHC in Cole County Circuit Court, but the case is not adversarial litigation.
The process is subject to the 1999 GAMHC reorganization plan (the “plan”), the January 2000 stock purchase agreement between MetLife and GAMHC, the plan for the first distribution, and the current supervision of the liquidation court. The plan and stock purchase agreement are available on the MDI Web site.
In late March 2005 GAMHC mailed its second distribution of $200 million to the eligible members.
In February 2005 the SDL filed a report to the court regarding GAMHC's operations.
In January 2005 W. Dale Finke replaces Scott Lakin as the Director of the Department of Insurance and as the Liquidator of GAMHC.
In October 2004 and March 2005 GAMHC mailed initial distribution checks to eligible members who were included in the August mailing and whose objections were resolved.
In August 2004 GAMHC re-mailed notice packets on the initial distribution of sale proceeds to eligible members whose packets were returned by the U.S. Post Office after the April 2003 original mailing or after the October, 2004 follow up.
In July 2004 GAMHC continued the initial distribution by mailing checks to eligible members whose objections were resolved by the SDL’s determination of claim letters.
In March 2004 the SDL filed a report to the Court regarding GAMHC’s operations.
In February 2004 GAMHC sent supplemental checks to eligible members who were not included in last fall’s initial distribution.
The initial distribution of almost $1 billion was made in September 2003 to all eligible members except:
- eligible members who submitted an objection;
- eligible members whose notice packets were returned by the post office as undeliverable; and
- eligible members who contacted the distribution call center and notified GAMHC they did not receive a packet.
A follow up notice-packet mailing was made in October 2003 to eligible members who had not received the packet in April.
In April 2003 GAMHC mailed distribution notice packets to all members. The notice packets contained information on the liquidation and informed recipients how much they could expect from the initial distribution.
In February 2003 Cole County Circuit Judge Thomas J. Brown – the judge supervising the distribution of sales proceeds – approved the notice for initial distribution of $1 billion to the eligible members of GAMHC.
Over a two-year period, the GAMHC receivership continued managing and investing the funds until the contractual time expired for MetLife to file any lien related to the sale.
On Dec. 6, 2000, Brown issued a post-hearing order setting rules on how to distribute $1.2 billion in proceeds from the sale of GAMHC’s assets to MetLife. Brown's order provided that:
- Eligible policyholders (known as “eligible members”) as of Jan. 5, 2000, would participate in the distribution
- All eligible members would receive a "fixed share" that equally divides 5 percent of the net sales proceeds. Eligible members would receive so-called "variable shares" of the remaining 95 percent of the funds under a formula that takes into account the number of policies held, their age, amount and other factors. Brown accepted the special deputy rehabilitator's proposal on the broad terms of the formula.
- Parties that wanted to legally challenge the terms of the MetLife sale or management decisions that precipitated the sale had to file a "claim" by Jan. 31, 2001, or forfeit their right to do so.
Frequently asked questions
I owned a General American policy on Jan. 5, 2000, but I have not received a notice packet or a check. What should I do?
Can I cash in or change coverages in my General American policy without jeopardizing my share of the distribution of sales proceeds?
Will the distribution affect my investment in life/annuity contracts with General American Life Insurance Company or MetLife?
When will the members of GAMHC receive their distribution of the proceeds of the sale to MetLife?
How many distributions will the members of GAMHC receive?
How did GAMHC determine the distribution amounts?
Is the initial distribution subject to income tax?
What is the cost-basis for this liquidating distribution?
What tax rate will apply to future distributions?
GAMHC has my taxpayer identification number (or Social Security number) listed on its records, but I am only one of the people listed on the check. Will you issue 1099s to all of us?
How can I obtain a duplicate 1099-DIV?
The applicability of state and local taxes will depend on the specific circumstances of each eligible member. Please consult your tax advisor with respect to such taxes.
Where should I report the income on my federal income tax return?
How do I report this income on Schedule D?
Did I receive my check after May 5, 2003?
What, if any, are the continuing roles of General American and MetLife?
Are the GAMHC proceeds invested? Will the amounts distributed to eligible policyholders include the investment income earned on these funds prior to the distribution?
How are the proceeds of the sale currently invested?
What have the investments earned since the initial investment in January 2000?
What happens if an eligible policyholder changes his/her mailing address before the distribution has been made? Who should be notified of any such change? Who can answer further questions I have about the distribution?
See the General American news page for news releases and documents on this matter.