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Golden State Mutual Life Insurance Company
Estate Trust Officer: Scott Pearce
Email Address: PearceS@caclo.org
Telephone Number: (415) 676-5013
Conservation Date: 09/30/2009
Liquidation Date: 01/28/2011
POC Final Filing Date: 12/31/2013
Closure Date: 10/17/2016
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September 30, 2009 - Insurance Commissioner Steve Poizner announced today that Golden State Mutual Life Insurance Company has been served an order of conservation and will discontinue selling new policies immediately.

"My first duty is to protect policyholders," said Commissioner Poizner. "For some time my department has been concerned with Golden State Mutual's continued operating losses and repeatedly warned the company that continuing to sell assets to cover losses was hazardous to its policyholders and would eventually lead to conservation. Unfortunately, that day has now come. For the protection of its policyholders, the company has been seized to prevent continuing financial deterioration."

While Golden State Mutual operates in 12 states, it is based in California and subject to oversight and regulation by the California Department of Insurance (CDI). The company operates as a mutual insurance company to sell and service life and health insurance to customers principally in California, Texas, Michigan, Illinois, North Carolina and Louisiana.

The company's primary business is the sale of individual term and whole life products, with annuity riders attached on a participating basis through a number of general agents. In order to ensure that insurance policies are secure, state Law requires that companies like Golden State Mutual have more than $5 million in capital and surplus. At the end of June, Golden State Mutual reported capital and surplus of $1.65 million. During the 3rd quarter Golden State Mutual will report losses of approximately $600,000. The company has experienced significant net operating losses in every year for the past five years. Including losses through August 31, 2008, the company's losses total $6.1 million.

The company is regionally focused in California. During 2008 the Company wrote direct premiums of $5.4 million (46.4% of total direct premiums) in California and $2.2 million (18.8% of total direct premiums) in Texas, its second largest market.

Golden State Mutual has been under close scrutiny by CDI since 2004, with the Department regularly communicating with Golden State Mutual about its financial situation. CDI has taken numerous steps to assist the company's board of directors in an effort to improve operations. However the company continued operating in a financially hazardous condition and still lacks any rehabilitation plan.

At this point, Golden State Mutual has advised CDI that they will not oppose the conservation and the company has been taken over by the Commissioner's Conservation and Liquidation Office. That office will oversee the payment of claims and the receipt of premiums while developing a wind-down plan to protect the policy holders. Throughout this time it is necessary for insureds to continue to pay their premiums to keep their insurance policy in force.

If you have a policy with Golden State Mutual, you should refer to the company's website at www.gsmlife.com or contact your agent.

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