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Public Service Insurance Company (“PSIC”), Paramount Insurance Company (“Paramount”), and Public Service Mutual Holding Company (“PSMHC”) were affiliated companies, transacting business as the Magna Carta Companies. PSIC and Paramount merged, with PSIC being the surviving entity, prior to PSIC being placed into rehabilitation.

On March 16, 2017, the Circuit Court of Cook County, Illinois (the “Supervising Court”) entered an Agreed Order of Rehabilitation against both PSIC and PSMHC by the Circuit Court of Cook County, Illinois (the “Supervising Court”). Jennifer Hammer, Director of the Illinois Department of Insurance, and her successors in office was affirmed as the companies’ statutory rehabilitator (the “Rehabilitator”).

On September 14, 2017, the Rehabilitator filed a Motion For Approval of Procedures for Notice, Comment and Hearing on the Rehabilitator’s Petition For Approval of: (1) Plan of Rehabilitation for Public Service Insurance Company and Public Service Mutual Holding Company; and (2) Assumption, Assignment and Novation Agreement. On September 25, 2017, the Supervising Court entered an order approving procedures for notice, comment and hearing. On October 2, 2017, the Rehabilitator filed Petitions for Approval of Plan of Rehabilitation and for Approval of Assignment, Assumption and Novation Agreement along with a Supporting Memorandum for each Petition. On November 29, 2017, the Supervising Court entered an order approving the Assignment, Assumption and Novation Agreement (the “Transaction”) entered into, subject to the court’s approval, between the Rehabilitator and Sparta Insurance Company (“Sparta”). Sparta had until January 16, 2018, to close the transaction.

Sparta failed to close the transaction and the Rehabilitator then undertook a second invitation for bids process. On January 24, 2018, the Supervising Court entered an order approving the Rehabilitator’s request that her Petition For Approval Of The Rehabilitator’s Plan Of Rehabilitation For Public Service Insurance Company And Public Service Mutual Holding Company be withdrawn and stricken due to the failure of the Assignment, Assumption and Novation Agreement transaction previously approved by Supervising Court on November 29, 2017 to close by the contractually required deadline of January 16, 2018.

The Rehabilitator then undertook a second invitation for bids process. Subject to the approval of the Supervising Court, an award of bid was made to Premia Holdings, Inc. (“Premia”). On September 12, 2018, the Supervising Court entered an order approving procedures for notice, comment and hearing. On September 18, 2018, and September 19, 2018, the Rehabilitator filed Petitions for Approval of Amended Plan of Rehabilitation and for Approval of Stock Purchase Agreement along with a Supporting Memorandum for each Petition. On December 3, 2018, the Supervising Court entered two orders: (i) Memorandum Opinion and Order Approving Stock Purchase Agreement And Channeling Of Certain Assets and Liabilities; and (ii) Order Approving Rehabilitator’s Amended Plan of Rehabilitation (the “Amended Plan”). Under the stock purchase agreement (the “SPA”), immediately upon the January 9, 2019, closing of the SPA transaction Premia purchased 100% of the stock of PSIC, a portion of PSIC’s business was resumed by the Premia owned PSIC, and certain assets and liabilities were “channeled” into the resumed PSIC from the rehabilitation Estate of PSIC (the “Estate of PSIC”). Among the liabilities channeled into the resumptive and re-capitalized PSIC were all of PSIC’s remaining policyholder priority obligations. The resumptive PSIC is no longer in rehabilitation. Please note that if you have a claim arising under and within the coverage of a policy of insurance issued by PSIC (or Paramount) that those liabilities have been channeled out of the Estate to the resumptive PSIC.

The Amended Plan became effective January 9, 2019. The Amended Plan outlines, among other things, procedures for purposes of running off Estate of PSIC’s remaining liabilities (consisting of those liabilities that were not channeled into the resumptive PSIC). Non-channeled liabilities remain subject to the rehabilitation proceedings and the Amended Plan and include, by way of example, pension obligations, assumed reinsurance obligations (i.e., claims of cedent creditors) and other “general creditor” obligations, and surplus note holder obligations.

On July 15, 2019, the Supervising Court entered an order Approving Deadlines and Procedures For the Filing of Claims against the assets of the Estate of PSIC. November 12, 2019, was the final date by which a proof of claim could be submitted to the Rehabilitator as a timely filed claim against the assets of the Estate of PSIC.

Acting upon the petition of the Rehabilitator, on May 1, 2023, the Supervising Court entered an order finding the Estate of PSIC to be insolvent.