Special Master’s Status Letter Update
November 7, 2016
Gramercy Insurance Company in Receivership # 553
Special Deputy Receiver:
Primary Responsible Person:
Estate Counsel:
Receiver’s Counsel:
RLO Analyst:
Resolution Oversight Corporation
Ernesto A. Garza
Rachel Stroud
Margaret Jonon
Vicente Aguillon
Background
 Date of Permanent Injunction :
 Date of Permanent SDR Appointment:
 Claims Filing Deadline:
 States Licensed:



December 4, 2012
February 15, 2013
February 26, 2015
37 States: (AL, AR, AZ, CO, DE,
FL, GA, IA, ID, IL, IN, KS, KY, LA,
MD, MN, MO, MS, MT, NC, ND,
NE, NM, NV, OK, OR, PA, SC, SD,
TN, TX, UT, VA, WA, WI, WV, &
WY)
Lines of Business:
Inland Marine, Private Passenger
Auto Liability, Commercial Auto
Liability, Auto Physical Damage,
Surety, Credit, & Warranty
Guaranty Associations & Date of Impairment:
TPCIGA and 36 other GAs for the
States listed above--August 26, 2013.
Early access/distributions:
$6,605,951.99 (As of Sept. 30, 2016)
Twenty nine guaranty associations have received early access distributions / Cash
distributions were made in September 2015 for $4,867,778.16 and in July 2016 for
$10,051.80. Seven of the twenty nine guaranty associations have also received
$1,728,122.03 from custodial statutory deposit account withdrawals sent directly
to the guaranty associations.
Twenty two guaranty associations received second early access distributions for
Class 1 and partial Class 2 claims on October 26, 2016, in the amount of
$4,682,835.85.
Statement of Assets and Liabilities September 30, 2016
 Total Assets
$ 18,074,230.00
o Cash Assets
$10,354,443.00
o Non cash Assets
$ 7,719,787.00
 Total liabilities
$ 46,224,640.00
 Negative equity
$(28,150,410.00)
Status and activity since last status conference
Asset Recovery:
 The Virginia, Missouri, and Florida statutory deposits were released by the
department of insurance agencies in September 2016. Gramercy received a
total of $521,348.45 from the Virginia deposit and $43,346.77 from the
Missouri deposit. The remaining balance of the Missouri statutory deposit and
all of the Florida statutory deposit were transferred directly to the Guaranty
Associations as early access distributions.
 A reinsurance receivable amount of $4,424.57 was received this quarter from
the Barclays Bank letter of credit on an amount due from Allianz f/k/a Cornhill
on a First Marine XOL policy.
 Other recoveries received this quarter from investment, interest on cash and
loss run fees were $15,722.00
 The SDR filed a claim for refund from the Texas State Comptroller unclaimed
fund in the amount of $45,362.41 and it is under review.
Claims:



POC filing deadline:
February 26, 2015
Number of Notices sent to date:
40,299
Status of POC Processing:
 POC’s filed as of September 30, 2016:
 POC’s Pending Determination or Final Classification:
Class 1 & 2 IGA POCs
Class 2 - Non IGA POCs
Class 5
Unclassified
Total:
32
68
7
__1
108

POC’s processed this quarter:
1
13
20
4
Allowed Class 2 Claims
Classified Class 5 and Lower Priority
Disallowed Claims
Fully Covered IGA Claims

POC’s processed to date:
4
3
1
Allowed Class 1 Claims
Allowed Classes 1&5 Claims
Partially Allowed & Classified Class
1&5
Allowed Class 2 Claims
Classified Class 3
Classified Class 5 & Lower Priority
Claims
Disallowed Claims
Fully Covered IGA Claims
3
1
470
90
24

704
The SDR responded to requests from Guaranty Associations, policyholders,
claimants, attorneys, AMWINS, vendors, regulatory entities and producers



regarding Gramercy claim and policy issues. The required UDS reports were
filed and other policy and claim documents requested by the Guaranty
Associations were supplied. The SDR also assisted the Guaranty Associations
in re-opening closed claim files and setting up new claim files.
The SDR staff prepared and filed a Guaranty Associations early access
distribution application with the receivership court on September 2, 2016.
The SDR and claim staff reviewed the pending proofs of claim to prepare final
determination and classification notice letters to the claimants.
The SDR claim staff received and processed 34 requests this quarter from
policy holders and insurance companies for prior period loss runs and insurance
coverage verifications.
The August 31, 2016 claim counts for all Guaranty Associations are as follows:
IGA
Fund
AL
AR
AZ
CO
FL
GA
IA
ID
IL
IN
KS
KY
LA
MN
MO
MS
NC
NM
NV
OK
OR
PA
SC
SD
TN
TX
UT
WA
Totals
Open Closed Open
Closed
Claims Claims Features Features
6
12
12
20
1
1
1
1
1
2
4
3
0
2
0
3
8
140
52 304
20
444
47 684
1
8
1
9
0
1
0
2
4
71
6
89
1
6
1
12
1
3
1
9
1
2
2
4
1
6
2
9
1
4
1
6
1
7
1
21
9
12
15
25
1
2
1
3
1
1
5
9
0
9
0
12
1
0
2
0
1
6
1
6
8
13
13
17
4
65
7 123
0
1
0
1
1
19
1
32
48 1,023
100 1,524
0
1
0
2
1
9
1
20
122 1,870
277 2,950
Administrative:
 A record destruction application was approved by the receivership court on May
3, 2016, and the required record files were destroyed by the record storage
facility vendors this quarter.
General Legal Activities:
 Estate Counsel and claim staff assisted the SDR in researching the causes of
insolvency and responsible parties and assisted with POC determinations and
worked with various Guaranty Associations and their defense counsel with
settlement strategies on over the cap claims.
Conclusion:
 Major Achievements since last Status Conference:
1. The SDR received approval from the Virginia, Missouri, and Florida
departments of insurance to release the statutory deposit funds as partial
early access distributions to the Guaranty Associations in Missouri and
Florida. A portion of the Missouri and all of the Virginia statutory funds
were sent directly to the Gramercy receivership Texas State treasury
account.
2. The SDR staff prepared and filed a Guaranty Associations early access
distribution application with the receivership court in September 2016.
3. This SDR worked with Guaranty Associations providing POC and claim
information, and prepared the required UDS reports.
4. The SDR received approval from the receivership court to destroy certain
records stored at offsite warehouses to save expenses for the receivership
estate, and the records were destroyed this quarter.
5. 38 POC determination and classification letters were processed and sent to
claimants this quarter.
 Estate Team Goals for the next quarter:
1. The SDR staff will work with the Guaranty Associations on the transfer of
re-opened, closed, and new claim files and the transmission of the required
UDS reports.
2. The SDR staff will process the Class 1 and partial Class 2 court approved
early access distributions to the guaranty associations.
3. The SDR staff will continue collecting agent balances, premiums,
subrogation, salvage, and reinsurance owed to the receivership estate.
4. The SDR staff will review POCs and send determination and/or
classification letters as warranted.
5. The SDR staff will work with the Georgia department of insurance on the
requirements for release of the Georgia statutory deposit to the Georgia
insurance guaranty association as an early access distribution.
 Estimated Closing Date of Receivership: May 2018.
 Identification of Factors Affecting Closing Date and Final Distribution:
1. Finalizing the POC determinations and handling any objections to the
SDR’s determinations.
2. Asset Collection litigation that may be initiated to collect damages for the
Estate.