Bankruptcy Proceedings and Liquidations of Insurance Carriers and Self-Insured Employers

 o: All Judges and Office Supervisors
From: Peter J Caldercne, Director and Chief Judge NJ Division of Workers' Compensation
Subject:Bankruptcy Proceedings and Liquidations of Insurance Carriers and Self-Insured Employers
Dated: October 6, 2003

The bankruptcy proceedings and liquidations of both insurance cai-riers and self-insured employers have created nationwide disruptions and problems in the handling of workers’ compensation cases. In New Jersey, the Department of Banking and Insurance is directly responsible for maintaining the guarantee funds and for reassigning claims in these situations. We are aware that there are thousands of cases in our court that have been delayed or otherwise adversely affected while the redistribution of cases and claim funding is being processed. This memorandum will briefly outline the current information we have received.

The cases in which MasterCare was the insurance carrier have been transferred to New Jersey Manufacturers for respondent representation. In those cases where MasterCare was the third party administrator, the matters are being reassigned to the responsible carrier.

Fremont, Frontier, Legion, Home, Reliance, and Villanova insurance cases are being reassigned to Specialty Risk Services (SRS) for respondent representation. Approximately 70% of these cases have already been sent to SRS.

The bonds for two bankrupt self-insureds, Bradlees and Grand Union, are expected to he depleted. Once the bonds are no longer available, the cases will be handled by the Self-Insurers Guarantee Fund for respondent representation.

Administrative Supervisory Judge Ricciardelli has been in continuous contact with Banking and Insurance on these n;atters. Please consult with Judge Rieeiardelli on any ease that has not been reassigned which needs immediate action such as an emergent motion for medical benefits.