A decision on a the fate of three insurance affiliates of bankrupt Metropolitan Mortgage & Securities Co. might be weeks away, according to the Washington state Office of the Insurance Commissioner.
Though several bids were submitted in late May, regulators are moving slowly on the sale of Spokane-based Western United Life Assurance Co., Old Standard Life Insurance Co., of Idaho, and Old West Annuity and Life Insurance Co., of Arizona. The three companies were offered for sale as a package deal with the goal of earning cash for thousands of Metropolitan creditors.
Metropolitan’s collapse amid accounting problems and federal investigations has made the sale of its insurance companies difficult.
Regulators in the three states where the insurance affiliates were headquartered put the companies into receivership. Though the insurance companies were solvent, regulators wanted to keep their business dealings independent of their troubled parent company.
The commissioners have declined to disclose how many bids were received or the value of the bids.
Though the insurance commissioner’s office, which is coordinating the sale of the three firms, initially hoped that a successful bidder could be announced in mid-June, it has backed off that aggressive schedule.
Officials are trying to ensure that the bids are solid and in the best interests of multiple parties, including taxpayers and Metropolitan creditors.
“The worst thing would be selling these companies and then have that company fail and end up back in receivership,” said insurance commissioner spokesman Bill Ripple. “We’re not going to let that happen.”
He did say that regulators were conducting expansive due diligence on at least two bidders.
“I know that we have people looking at all the options,” he said, “and there’s hope this can be done ASAP, maybe before summer is out, but we’re talking about companies with assets in excess of a billion dollars … it’s going to be done right.
“This isn’t like selling your house.”
When the sale of the companies was announced, Washington Insurance Commissioner Mike Kreidler held out hope that a successful bidder might keep the insurance firms running rather than chop them up for quick sale of their assets.
Also, he expressed confidence about recovering the equity of the firms – estimated at about $100 million — to help boost the recovery for Metropolitan’s creditors.
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