An insolvent New Orleans life insurance company cost an industry-backed guaranty fund $2.5 million and has a court-appointed receiver scrambling to recover $1 million from the sale of related funeral homes and other assets — mostly in New Orleans and Houma.
In addition, the remaining life insurance policies that were held by Gertrude Geddes Willis Life Insurance Co., of New Orleans, valued at $4.19 million, were turned over to New Orleans-based Majestic Life, court records in Baton Rouge show.
“They’re still in receivership,” a spokeswoman for the Louisiana Department of Insurance said this week of Gertrude Geddes Willis Life Insurance Co. “Their book of business was (taken over) by Majestic Life Insurance Co.”
“Majestic does not pay any money,” for Gertrude Geddes Willis Life Insurance Co. business but assumes liability for its remaining policies, said Ileana Ledet, the Insurance Department’s deputy commissioner for public affairs.
Court records show Gertrude Geddes Willis Life Insurance Co. was at least 63 years old when it was declared insolvent.
However, some of the company’s related Gertrude Geddes Willis Funeral Home businesses are more than a century old. Now, at least some of those funeral home properties are being sold by the insurance company’s court-appointed receiver.
Gertrude Geddes Willis Life Insurance Co. already was insolvent in October 2013 when Insurance Department attorneys asked 19th Judicial District Judge Tim Kelley to appoint Cara Bostick as receiver to operate the company, court records show.
“GGWLIC’s insolvency is $3.5 million,” Ledet said Friday.
Ledet said the Louisiana Life & Health Guaranty Association paid $2.5 million to cover some of the claims of Gertrude Geddes Willis Life Insurance Co.’s policyholders. The guaranty association is funded by life insurance companies in the state to protect customers of failed insurers.
Court records show Bostick is in the process of selling real estate and other assets owned by Gertrude Geddes Willis Life Insurance Co. in New Orleans, Houma and elsewhere in an effort to recover $1 million.
Ledet said that $1 million is earmarked for Gertrude Geddes Willis Life Insurance Co. creditors.
Among the real estate being sold is Gertrude Geddes Willis-Terrebonne Funeral Home, 617 Bond St., Houma.
In New Orleans, three other properties that, combined, serve as one funeral home in the 1500 block of North Derbigny Street and the 1600 block of Lapeyrouse Street also are being sold by the insurance receiver.
Majestic Life, which reported assets of $6.7 million last year, must maintain $5.1 million in reserves to fund claims against Gertrude Geddes Willis Life Insurance Co.’s remaining life insurance policies.
In return for that coverage, Ledet said, the guaranty association and receiver ceded $4.19 million in assets from the Gertrude Geddes Willis Life Insurance Co. estate to Majestic Life.
A telephone message seeking comment from a member of Majestic Life’s ownership was not returned.
“Majestic Life will be sending out assumption certificates to policyholders of GGWLIC to notify them the policy has been sold to Majestic,” Ledet said. She said those certificates will include contact information for use by policyholders.
Majestic Life has additional representatives in Marrero, Slidell, Plaquemine and Franklinton, state records show.