Department of Insurance, Securities and Banking: Press Release

The District of Columbia Department of Insurance and Securities Regulation (DISR) took control of American Preferred Provider Plan of the Mid-Atlantic, Inc. (APPP) on Friday, August 4th, after a DC Superior Court judge appointed Commissioner Lawrence H. Mirel the rehabilitator of APPP. APPP failed to maintain the minimum statutory net worth requirement of $1 million. During this rehabilitation, DISR will review the company's financial health to determine if it can continue to pay policyholders' claims and other obligations. "Rehabilitation" is an effort by a state insurance department to restore a company's financial health so that it can continue to pay policyholders' claims.

Mirel reports that there has been no evidence of enrollees not receiving care and that enrollees should continue seeing their providers as usual.

In a separate order, Mirel named Alexander T. Farley Special Deputy Rehabilitator. Farley is president of American Insurance Management (AIM). DISR has engaged AIM to perform a review of the company to determine if it can be maintained as an ongoing concern. According to Mirel, "the Department sought the court ruling to protect the HMO's enrollees. Enrollees' interests are best served if APPP can maintain the minimum statutory net worth requirement of one million dollars, but if that proves impossible, we will seek an orderly transition that will attempt to ensure no disruption in the delivery of health care services." He continued, "the action by DISR is essential to ensure that District consumers have protection, benefits and coverage during this time. We will continue to assess the ability of APPP to continue operations," said Mirel.

Please direct questions regarding the order to Kathy Rickford, HMO Attorney for DISR at (202) 727-8000.

APPP enrollees with questions can call Ms. Bell in APPP's Membership Services Department at (800) 464-1474.

The DC Department of Insurance and Securities Regulation (DISR) has two missions, (1) to provide fair, efficient and fast regulatory supervision of the insurance and securities businesses for the protection of the people of the District of Columbia, and (2) to create conditions that will retain and attract national and international insurance and other financial businesses to the District.