Pat Rooney's insurance company is about to die, nearly two months after Rooney himself passed away.
Medical Savings Insurance Co. was ordered into receivership today by Marion County Judge Theodore Sosin. Indiana Insurance Commissioner Jim Atterholt will oversee liquidation of the company's assets.
Medical Savings, based in Park 100, sold individual high-deductible health insurance policies, joined with health savings accounts.
Rooney was CEO of Medical Savings when he died in September at age 80. His estate, led by one of his daughters, Therese Rooney, decided to stop investing in the struggling insurance company.
Rooney bought and renamed the company in 1996 after retiring as chairman of Indianapolis-based Golden Rule Insurance Co., where he had pioneered the health savings account concept. Golden Rule was acquired by Minnesota-based UnitedHealth Group in 2003.
Golden Rule will help Atterholt wind down Medical Savings' operations. Golden Rule has agreed to guarantee coverage for any of the 6,500 Medical Savings policyholders who transfer their coverage to Golden Rule.
Policyholders who keep their accounts aren't allowed to make additional cash contributions to the accounts. Also, in the short term, they can access only 30 percent of their account balances. Atterholt intends to sell off Medical Savings' assets to help fully fund the policyholders' accounts.
Medical Savings' profits evaporated and its customer rolls shrank in the last two years as large insurers, such as WellPoint and UnitedHealth, sold health savings accounts more aggressively. Also, its investments were hammered during the market plunge that began in September.
"Through a shift in the marketplace over the last 24 months, Medical Savings slowly has fallen out of compliance with industry standards," Atterholt said in a written statement.
"The Department has worked with Medical Savings, and with the full cooperation of its parent company, Medical Savings Investment Inc., to keep the company in business with multiple capital contributions. Unfortunately, last month, it became clear that no further capital contributions would be made and that immediate legal action was required."
Atterholt has asked Randy Lamberjack, president of Noble Consulting Services Inc., to serve as special deputy, overseeing the current rehabilitation process and expected liquidation proceedings. Lamberjack oversaw the wind-down of Benicorp Insurance Co. in 2007.
For more about Rooney and the businesses and not-for-profits he left behind, click here.