Assets will go to health insurance policyholders, creditors BY PAUL C. CURTIS TGI Staff Writer Honolulu First Circuit Court Judge Sabrina S. McKenna yesterday approved a motion to allow the state to sell the assets of Hawai’i HealthCare Alliance (HHCA)
Assets will go to health insurance policyholders, creditors
BY PAUL C.
CURTIS
TGI Staff Writer
Honolulu First Circuit Court Judge Sabrina S.
McKenna yesterday approved a motion to allow the state to sell the assets of
Hawai’i HealthCare Alliance (HHCA) to pay creditors.
The court paperwork is
expected to be filed early next week, which will also begin a 30-day period in
which an appeal may be made by Texas resident Darren Larson, HHCA’s organizer,
said Wayne Metcalf, state insurance commissioner.
Larson’s Honolulu
attorney, David Gierlach, did not return phone calls Thursday for comment about
whether or not his client would appeal the decision. He earlier denied state
officials’ claims that HHCA is insolvent and unauthorized to sell health
insurance.
HHCA’s assets, once made liquid, will be used to pay
policyholders, healthcare providers and other creditors. The list includes
potentially several hundred individuals on Kaua’i who may have prepaid premiums
or be waiting for claims reimbursements, said Metcalf.
A known Kaua’i
creditor is Wilcox Health System.
By law, Metcalf, as insurance
commissioner, is the liquidator. He said his task is to make sure the estate of
HHCA is “made whole,” meaning all creditors owed money by HHCA are
paid.
His next step, beginning after the court order is filed next week, is
to “marshal the assets such as they are, and determine what claims the estate
may have against third parties, moneys to the estate either by virtue of
contract or tort, or both,” Metcalf said.
A liquidation would take about
six months to complete, and longer if there is further litigation involved, he
said.
Metcalf said the state will seek repayment from “all possible
sources,” including Larson.
Creditors like Wilcox Health System (Wilcox
Memorial Hospital and Kaua’i Medical Clinic) will likely have to wait their
turn for payment.
In administrative hearings next week, the state will seek
to strip Larson of his state license to sell insurance products and fine him
$100,000 for alleged “illegal activities related to the organization and
operation of HHCA and other violations of state insurance laws,” according to a
statement from the insurance division of the state Department of Commerce and
Consumer Affairs.
Further state action aims at enforcing a cease-and-desist
order to prevent Larson from making further referrals to the SAI Plus LLC
Health Insurance Plan, which is under federal and state investigation for
possible criminal and fraudulent acts.
Policyholders left without health
insurance as a result of HHCA being seized, declared insolvent and its assets
liquidated can secure alternate coverage with written proof of 18 consecutive
months of medical coverage from a provider or providers, Metcalf said.
With
that proof, other health insurers cannot deny former HHCA policyholders
coverage, he said.
Staff Writer Paul C. Curtis can be reached at
pcurtis@pulitzer.net or 245-3681 (ext. 224).
