On May 10, 2016, the Supreme Court of the State of New York, New York County, entered an Order of Liquidation as to Health Republic Insurance of New York ("HRINY") based upon a petition filed by the Acting Superintendent of the New York Department of Financial Services, Maria Vullo. The Order was entered upon the filing of an Order to Show Cause by the Acting Superintendent dated April 22, 2016 and a Verified Petition duly verified on April 20, 2016.
The Order of Liquidation declares HRINY insolvent within the meaning of Section 1309 of the New York Insurance Law, and directs the Superintendent, as Liquidator, to take possession of HRINY’s property and to liquidate its business and affairs. The Order further authorizes the Liquidator to:
- incur and pay administrative expenses;
- permanently enjoin and restrain HRINY from transacting business, disposing of assets, or interfering with the Liquidator’s possession or control or management of its property or the discharge of the Liquidator’s duty with respect to HRINY or the liquidation proceeding.
Any party that has contracted with HRINY (or any third-party beneficiary of such a contract) is prohibited from modifying or terminating such contract or the rights or obligations of HRINY thereunder, including by declaring an event of default under an existing contract on account of the insolvency of HRINY, the commencement or continuation of the liquidation proceeding, non-payment or the financial condition of HRINY prior to the liquidation proceedings, or any action by the Superintendent with respect to HRINY.
Importantly, pursuant to Section 4307(d) of the New York Insurance Law, no HRINY member shall be liable to any provider, irrespective of whether the provider participated in the HRINY network, for any services covered by HRINY; no provider shall collect or attempt to collect from any member sums owed by HRINY; and no provider shall maintain any action against any member to collect sums. However, nothing in the Liquidation Order will affect a member’s liability for, or prohibit a provider from collecting or attempting to collect from or maintaining an action against any member to collect, coinsurance amounts, co-payments, and deductibles owed by such member.
For the time being, only member or policyholder claims should be submitted to the Liquidator. No proof of claim bar date has been set for other claims against the liquidation estate until further order of the court.