NEW ORLEANS — Because of a dissolution of a failed
health-maintenance organization, six Louisiana universities will each
receive $460,000, according to a news
release from state Insurance Commissioner Jim Donelon.
The six universities receiving funds are Southern University, the
University of Louisiana at Lafayette, the University of Louisiana at
Monroe, the University of New Orleans, Xavier University of New
Orleans and Louisiana State-Shreveport.
Back in 2011, the Louisiana Supreme Court ruled in favor of the
state insurance-commissioner office and ordered AmCare into
liquidation. The HMO went into receivership
in 2002 after investigators
came up evidence that it was severely undercapitalized and had
manipulated its financial records by moving assets back and forth
between sister companies in an attempt to appear solvent.
By ruling in favor of the insurance commissioner, AmCare
policyholders and providers were able to receive their payments.
Since 2011, the insurance commission had been working to ensure
policy holders, providers and creditors were paid the principal and
interest they were owed.
Donelon and the Louisiana Insurance Commission issued the news
release on Feb. 6.
“The dissolution of a company is never a pleasant thing, but I
am glad to report that this ending is going to have a beneficial
outcome,” Donelon said
in the release. “We have been able to pay those to whom money was
owed and we are investing the remaining funds in our next generation
through educational insurance and business programs at these
The state insurance commissions of Louisiana, Texas and Oklahoma
suit against AmCare Health Net Inc., alleging breach of contract and
The Louisiana Supreme Court ruled in the states’ favor in 2011,
and they each received punitive and compensatory damages. The law
stipulates that the insurance commissioner can distribute the funds,
with that plan subject to court approval.
The law allows for the insurance commissioner to disburse the
funds according to a plan approved by the court. The plan for
distributing funds was signed
by 19th District Court Judge Janice G. Clark of Baton
The schools may have a possibility
for acquiring even more funds. In addition to receiving the surplus
funds, the universities may seek matching funds from the Kevin P.
Reilly Sr. Louisiana Education Quality Trust Fund established in the