Department Of Financial Services Files Health Republic Liquidation Proceeding

At long last, the New York State Department of Financial Services filed a special proceeding on Friday, April 22, 2016 in the Supreme Court, New York County, to liquidate Health Republic Insurance Company of New York, Inc. The stated basis for seeking liquidation is Health Republic’s consent and its insolvency. The petition specifically states that the Department has determined that Health Republic is unable to pay its obligations as they mature in the ordinary course of its business, and that its required reserves and other liabilities exceed its assets. If the Court grants the petition, the Acting Superintendent of Financial Services, Maria Vullo, would be appointed as Liquidator.

If the Court grants the Department’s petition, and the liquidation process begins, the Department will take possession of Health Republic’s assets, books, and records, and begin a procedure for disposing of assets and paying outstanding claims. Given the stated insolvency of Health Republic, it is highly likely that claims will be paid, if at all, at a small percentage of their actual value.

Finally, the Court has entered a temporary restraining order that prevents parties from taking certain actions against Health Republic. Of particular relevance to providers, the order prevents providers:

  • Commencing any lawsuit or arbitration against Health Republic (or, if such a lawsuit or arbitration has already been commenced, taking steps to prosecute that lawsuit or arbitration.
  • Terminating or modifying any contract the provider may have with Health Republic.
  • Prohibiting a provider to collect from any Health Republic Member any sums that it maintains Health Republic owes it (except for deductibles, co-pays, and co-insurance amounts).

If you have any questions about the impact of this liquidation proceeding, please contact the GW attorney with whom you normally work.

Categories: Managed Care