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Capson
Physicians Insurance Company was placed into liquidation on June 28, 2019, at
the request of the Texas Department of Insurance. This action was
necessary to protect policyholders. The related Order Appointing
Liquidator and Permanent Injunction is available for viewing on the
Receivership Documents Page of this web site. PROOF OF CLAIMS
DEADLINE The deadline for
filing a Proof of Claim (“POC”) is December 28, 2020. All POCs must be received by the SDR at the
address on the POC form Viewing this web page constitutes notice of
the POC filing deadline
LIQUIDATION NOTICE Capson
Physicians Insurance Company has been placed in liquidation by
court order. All
insurance policies issued by Capson were canceled as of July 28, 2019.
IMPORTANT NOTICE: The following
Frequently Asked Questions and answers are intended to provide interested
parties and their counsel with an overview of Capson Physicians Insurance
Company’s liquidation. Cantilo & Bennett, L.L.P., as Special
Deputy Receiver of Capson Physicians Insurance Company, reserves the right
to provide amended and supplemental information that may affect those with
interests in Capson Physicians Insurance Company. Nothing herein
constitutes a binding legal statement or the waiver of any right by the
Commissioner of Insurance of the State of Texas, the Special Deputy
Receiver, or their representatives. Nor are the statements contained
herein intended as legal advice concerning, or complete legal descriptions
of, the events or matters to which they relate. The material provided
herein is offered only for informational purposes. For full legal
information, interested parties should review the source documents and
applicable legal authorities. Consult your agent or attorney for more
information regarding your rights. FREQUENTLY
ASKED QUESTIONS GENERAL
QUESTIONS What
is a receivership? A
receivership is a court proceeding.
The Texas Insurance Code authorizes the Commissioner of Insurance
(“Commissioner”) to initiate a receivership to rehabilitate or liquidate
an insurance company.
In a receivership, the Commissioner is the Receiver of the insurance
company, and the Receiver can appoint a Special Deputy Receiver (“SDR”).
Is
Capson Physicians Insurance Company (“CPIC”) still operating its insurance
business? No.
On June 28, 2019, CPIC was placed
into liquidation. The Travis
County District Court (“Court”) entered an order finding CPIC was
insolvent, placed it into liquidation, and appointed the Commissioner as
Receiver (“Liquidation Order”). Cantilo
& Bennett, L.L.P. has been appointed SDR by the Receiver. Liquidation
is like federal bankruptcy but is regulated by the state.
An insurance company is placed into liquidation when the Texas
Department of Insurance determines that the company may have insufficient
assets to pay its policyholders, claimants, and other creditors.
In a liquidation, an SDR is appointed by the Receiver to protect the
interests of policyholders and others and to distribute the insurance
company’s remaining assets as directed by the Court in accordance with the
laws and regulations of the state. The
SDR is responsible for the day-to-day administration of the insurance company.
The Receiver and the SDR’s actions are dictated by the Court, and the
laws and regulations of the state. Why
is CPIC in liquidation? CPIC
was placed into liquidation in order to protect its policyholders, claimants,
other creditors, and the public from further harm which might be caused by
CPIC’s continued operation in light of its inability to pay its debts to
policyholders, claimants, and other creditors as they become due. What
is the Liquidation Order? The
Liquidation Order is a final order of the Court that granted the Receiver,
among other powers and duties, the authority to take control over CPIC,
marshal its assets, and liquidate them. The
Receiver collects the assets belonging to CPIC on behalf of CPIC during
liquidation (also referred to as the “receivership estate”).
Assets are then used to reduce debts of the receivership estate and pay
claims as outlined in Texas Insurance Code Chapter 443. How can I contact the SDR? The SDR’s contact
information is as follows: Cantilo
& Bennett, L.L.P. How
can I obtain information about CPIC’s receivership? Updates
will be posted on the SDR’s web site as additional information becomes
available. The web site address
for the SDR’s web site is www.capsonsdr.com.
Pleadings and orders will be posted on the SDR’s web site after they
have been filed with or entered by the Court. I
received a notice of termination from CPIC.
When is my CPIC policy canceled? The
Liquidation Order canceled all policies issued by CPIC, including, but not
limited to, “tail” coverage and/or “extended reporting period”
coverage, at the earliest of the following: (1)
July 28, 2019; (2)
the date of expiration of the policy according to its terms; or (3)
the date the insured replaced or otherwise terminated the policy. Accordingly,
if you have a policy issued by CPIC, you will need to obtain replacement
coverage for any coverage CPIC currently provides to you no later than July
28, 2019. If
you have not obtained a new replacement policy, you should do so immediately!
Your CPIC policy can no longer be renewed; however, all renewals issued
by CPIC before the June 28, 2019, date of liquidation will be effective
pursuant to their terms until canceled in accordance with provisions of the
Liquidation Order as summarized above. If
you have a question about your policy, please call the CPIC office directly at
(512) 609-7900. How
should I obtain replacement coverage and new medical
malpractice insurance? To
avoid a gap in your medical malpractice insurance coverage, the effective date
for your new replacement policy should be before July 28, 2019, or earlier as
the circumstances may be. You may
also want to secure a new replacement policy with retroactive coverage dating
back to the retroactive date shown on your CPIC policy.
If you have an agent, you should contact your agent as soon as
possible. If you do not have an
agent and you purchased your policy directly from CPIC, you should contact
other malpractice insurance companies directly or retain the services of an
agent to search for a new replacement policy on your behalf. Why
is it important I find replacement coverage? It
is important to find replacement coverage since continuing to practice
medicine without medical malpractice insurance will subject you to personal
liability. It may also violate
state law and subject you to other penalties. Will I be able to obtain tail coverage from CPIC? The Liquidation Order canceled all policies issued
by CPIC, including, but not limited to, “tail” coverage and/or “extended
reporting period” coverage. CPIC
will no longer offer “tail” coverage and/or “extended reporting
period” coverage as a result of the Liquidation Order.
Are
you going to provide a Verification of Coverage to allow me to obtain
replacement coverage? How soon can
I obtain that information? The
SDR team will provide a Verification of Coverage with your policy cancellation
information. You will be able to
use this document to obtain replacement coverage. I
have obtained new medical malpractice insurance.
How do I cancel my CPIC policy? You
or your agent should notify the SDR of your new medical malpractice insurance
as soon as possible. Policy
cancellation requests are processed by the SDR team in the order they are
received. A delay in canceling
your coverage could reduce any claim for unearned premium you may have. Now that CPIC is in liquidation, who will handle my
claim with CPIC? When the Liquidation Order was entered on June 28,
2019, CPIC stopped paying claims. Claims
are now payable as follows: Each state where CPIC was licensed has a Guaranty
Association/Fund who will pay “Covered Claims” under CPIC’s policies.
Covered Claims are subject to statutory payment limits and other
statutory conditions and exclusions. The
respective laws in each state will determine whether a claim qualifies as a
Covered Claim. Notice of claims
received by CPIC are being transferred to the Guaranty Association/Fund in
your state for processing. Contact
information for the Guaranty Association/Fund in your state is available at
the following link: https://www.ncigf.org/resources/links-and-contacts/.
Claims that are not payable in whole or in part by
the respective Guaranty Association/Fund can be presented to the receivership
by filing a Proof of Claim (“POC”). The
POC form and instructions are posted here.
(Note: “Filing
a POC” refers to your POC being postmarked or received otherwise by the SDR
prior to the expiration of the claims filing deadline). Claims
approved in the receivership are payable from CPIC’s funds, subject to the
availability of funds. How do I contact the Guaranty Association/Fund in
my state? Information regarding each Guaranty
Association/Fund is available at the following link: https://www.ncigf.org/resources/links-and-contacts/ How
do I report a claim that has not yet been reported to CPIC? All
new claims should be reported to the SDR.
The SDR will forward reported policyholder claims to the appropriate
Guaranty Associations/Funds. If
you are served with a lawsuit, also contact your state’s Guaranty
Association/Fund and provide them with a copy of the lawsuit papers. When
is the POC filing deadline? The
POC filing deadline is 11:59 p.m. CDT on December 28, 2020.
Notice of the POC filing deadline was provided to known creditors and
published in several newspapers. A
copy of that notice, the POC instructions, and the POC form are posted here.
Is
there a deadline for filing a claim with a
Guaranty Association/Fund? There
is typically a deadline for filing a claim with a Guaranty Association/Fund.
This will be governed by the laws of your state.
You will need to be sure and check with the Guaranty Association/Fund
in your state to ascertain any deadlines that may affect your rights. I was insured by CPIC and have a medical
malpractice lawsuit pending against me. What
do I do? Subject to certain statutory conditions and
exclusions, the Guaranty Association/Fund in your state will defend you if
CPIC was obligated to provide a defense and the lawsuit concerns a Covered
Claim. Moving forward, you should
coordinate your defense with the Guaranty Association/Fund in your state. Will
I have to pay my own defense costs if my claim is not covered by the Guaranty
Association/Fund in my state? Yes,
you will be responsible for providing your own defense and hiring counsel to
protect your rights. You will be
able to submit these payments when you file a POC. Will
I be responsible for paying any settlements/judgments in addition to defense
costs if my claim is not covered by my state Guaranty Association/Fund? Yes,
you will be responsible for paying any settlement or judgment in addition to
defense costs. You will be able to
submit these payments when you file a POC. What is unearned premium? Unearned
premium is the amount of premium you paid to CPIC for which, due to the
cancellation of your policy, you did not receive insurance coverage. Are
there any requirements for filing a claim for unearned premium? Unearned
premium claims may be covered by the Guaranty Association/Fund, subject to
statutory payment limits and other statutory conditions and exclusions.
If any part of an unearned premium claim is not a Covered Claim, a POC
can be filed in the receivership. The
POC form and instructions are posted here. (Note:
“Filing a POC” refers to your POC being postmarked or received otherwise
by the SDR prior to the expiration of the claims filing deadline).
If you believe that you have a claim for unearned premium, you should
call the CPIC office at (512) 609-7900 and inquire. When
is the POC filing deadline? The
POC filing deadline is 11:59 p.m. CDT on December 28, 2020.
Notice of the POC filing deadline was provided to known creditors and
published in several newspapers. A
copy of that notice, the POC instructions, and the POC form are posted here.
I
do not have a claim for indemnity or a claim for unearned premium.
Should I file a POC? Yes,
if you have, for example, unpaid bills for providing services, unpaid
commissions, unpaid claims, or unpaid reinsurance billings, you should file a
POC. This may include invoices for
services related to a claim or policy even if you were initially hired by one
of CPIC’s third-party administrators or defense counsel.
The POC form and instructions are posted here. (Note:
“Filing a POC” refers to your POC being postmarked or received otherwise
by the SDR prior to the expiration of the claims filing deadline).
Claims approved in the receivership are payable from CPIC’s funds,
subject to the availability of funds. I am an agent of CPIC.
How will my unpaid commissions be paid? Payment
for unpaid commissions will be considered in the POC process.
You should file a POC in the receivership.
The POC form and instructions are posted here. (Note:
“Filing a POC” refers to your POC being postmarked or received otherwise
by the SDR prior to the expiration of the claims filing deadline).
Claims approved in the receivership are payable from CPIC’s funds,
subject to the availability of funds. I
am defense counsel that was hired by CPIC to defend an insured.
Will I be paid for my legal services? Will my experts be paid?
Payment
for legal or expert services that were provided prior to February 11, 2019,
will be considered in the POC process. You
should file a POC in the receivership. The
POC form and instructions are posted here. (Note: “Filing a POC” refers to your POC being
postmarked or received otherwise by the SDR prior to the expiration of the
claims filing deadline). Claims
approved in the receivership are payable from CPIC’s funds, subject to
statutory priorities and the availability of funds. If
you were hired as defense counsel after February 11, 2019, or the SDR
requested that you perform certain services after that time, you will be paid
for services provided through the date of liquidation, June 28, 2019, and do
not need to file a POC for those services.
You should submit your related invoices as soon as possible if you have
not already submitted them. Please
do not send duplicates. Payment
for legal or expert services provided after the June 28, 2019, will be
considered as part of the POC process; however, you should also contact the
applicable state Guaranty Association/Fund to determine the availability of
guaranty coverage for these costs. When is the POC filing
deadline? The
POC filing deadline is 11:59 p.m. CDT on December 28, 2020.
Notice of the POC filing deadline was provided to known creditors and
published in several newspapers. A
copy of that notice, the POC instructions, and the POC form are posted here.
When
will I receive a decision on my claim? In
what order will claims be paid?
Claims
are processed as received. The
Texas Insurance Code provides a classification system, assigning claims
different levels of priority. Claims
classified at a higher level must be paid in full before claims classified at
a lower level can be paid. The SDR
is not required to approve or deny a class of claims until it appears
reasonably likely that assets will be available for a distribution to that
class. Nevertheless, all claimants
will receive notice regarding the classification of their claims. When will approved claims
be paid? The
SDR is not required to pay claims for any level or priority until it appears
reasonably likely that assets will be available for distribution to that
level. Claims will only be paid
after they are approved by the Court and a distribution from CPIC’s funds is
ordered by the Court. It
is difficult to estimate the amount of funds available to pay claims at this
time. Accordingly, it is difficult
to ascertain which levels of priority will receive payment at this time. If
CPIC was my only appointment, will my license be suspended? If
CPIC was your only active appointment, your license will not expire unless you
fail to renew it by its expiration date. What do I do with funds
owed to CPIC? If
you have funds that are owed to CPIC, you are obligated to remit and provide
an accounting for those funds as required under your contract with CPIC and
the Texas Insurance Code. Send
payments to the SDR along with any required documentation.
FOR
ATTORNEYS OF CLAIMANTS How
was CPIC determined to be insolvent? The Court determined that CPIC was insolvent as
defined in Texas Insurance Code section 443.004(a)(13), and that grounds
existed to place CPIC into liquidation under Texas Insurance Code section
443.057. Accordingly, the Court
entered the Liquidation Order. What does the SDR do for
CPIC in liquidation? The
SDR administers the day-to-day affairs of CPIC.
The SDR’s responsibilities are similar to those of a trustee in
federal bankruptcy and include, among other things: obtaining
control of CPIC’s operations; identifying and securing company property and
records; marshaling and evaluating the assets of the company; handling
litigation filed by and against CPIC; operating the company’s information
systems and extracting data; investigating liability of parties responsible
for the company’s financial problems and identifying preferential transfers;
providing notice of the Liquidation Order to claimants and interested parties;
processing non-policyholder claims; distributing assets to creditors with
approved claims; and filing pleadings, financial statements, and reports with
the Receiver and the Court. The
SDR will also coordinate with Guaranty Associations/Funds to ensure an orderly
processing and handling of policyholder claims.
What is the permanent injunction and the automatic
stay and why were they created? Considering CPIC’s insolvency, the Permanent
Injunction was issued to enjoin CPIC from conducting further business as an
insurance company. In addition, an
automatic stay of all litigation is in effect to allow the SDR to review
records, determine outstanding liabilities and related priorities, and
transfer covered claims to Guaranty Associations/Funds.
Please refer to Section 5.1 of the Liquidation Order as to the extent
of the stay as provided by Texas Insurance Code section 443.008(c) and
(f). All persons are permanently
stayed from pursuing a claim against the receivership estate except through a
POC and the claims process set out in the Texas Insurance Code and the orders
entered by the Court. How
do I find out more information about a Guaranty Association/Fund’s handling
of Covered Claims? Covered
claims are defined in the Guaranty Association/Fund statutes in each state.
For more information on individual Guaranty Associations/Funds and how
to contact them, please visit https://www.ncigf.org/resources/links-and-contacts/. You
can also view parameters of what may be covered by Guaranty Associations/Funds
at the following link: https://www.ncigf.org/wp-content/uploads/2019/05/CLAIMS_PARAMETERS_2018.pdf How do I receive
notice of the actions taken by the SDR and the orders of the Court? All
pleadings and orders will be posted on the SDR’s web site.
If you have an e-mail address that allows you to receive e-mails with
very large attachments, you may request to be added to the service list for
pleadings filed by the SDR. Further,
the SDR provides status reports to the Court on a quarterly basis, which will
be posted on the SDR’s web site. The
special master assigned to the CPIC receivership estate holds quarterly status
conferences open to the public, which are normally scheduled for January,
April, July, and October, and are held in Austin, Texas. The
next status conference will be July 28, 2020, at 10:00 a.m., and quarterly
thereafter. |