By Glenn Scott
Advertiser Staff Writer
State Insurance Commissioner Wayne Metcalf said yesterday that after the court-ordered liquidation of Hawaii Healthcare Alliance, investigators will need about two months to work through plans to recover the companys remaining assets.
Circuit Court Judge Sabrina McKenna this week authorized Metcalf to take possession of the assets when she ordered HHA liquidated, finding that efforts to rehabilitate the company would be futile and possibly damaging to the failed health-care companys creditors and policyholders.
|State Insurance Commissioner Wayne Metcalf is waiting for "the smoke to clear."
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"Its going to take a little while for the smoke to clear," Metcalf said. "Were at the stage now where were trying to begin to determine whats out there and what causes of action we might have to take."
One key question, he explained, is whether company president Darren Larson, as a licensed agent, carried insurance against which parties might make claims.
Metcalfs office took action in October to halt Larsons operations, saying the company failed to post $675,000 to meet capital and reserve requirements before marketing its health insurance plan.
When the alliance was closed, it was estimated to have 3,000 customers targeting self-employed professionals and small-business owners.
In a statement issued yesterday, Metcalf said Hawaii Healthcare Alliance lacked the money to meet its obligations and was using premium payments from new customers to pay off old bills. Also, he said the company was unfairly denying customer claims.
Metcalf said HHA owed about $200,000 and had about $40,000 in liquid assets when regulators made their move in the first week of November.
Larson, however, said yesterday that the circumstances were and are better than Metcalf has suggested. "It really comes down to how the state is going to go about the liquidation," he said.
If assets are distributed according to the terms of the health-care contracts, he said, most of the bills will be paid.
"People wont be 100 percent satisfied," he said, "but it will be pretty close."
It is clear, however, that Larson and Metcalf dont agree on how much the company really had in the bank. Metcalf said that while HHA appeared to have $80,000 on the books when the operation was halted, the actual amount was half of that. Larson said it was $160,000.
As for even partial payments to creditors and policyholders, Metcalf said the timetable will depend on several issues, including time needed for litigation.
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