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 institutions.”
The state insurance commissions of Louisiana, Texas and Oklahoma filed suit against AmCare Health Net Inc., alleging breach of contract and other torts.
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 Rouge.
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 state constitution.