ditional 12.287 percent paid after sale of
the bank’s assets.
“The court’s decision was limited to a
narrow issue of administrative law regard-
ing the FDIC’s authority,” Kevin Waetke, a
spokesman for Aviva USA, said. “It is impor-
tant to note that this issue occurred three
years ago and the decision has no impact
on our current operations. Aviva does not
intend to pursue the matter any further.”
Aviva had placed its money in a small
bank far from Aviva USA headquarters in
West Des Moines, Iowa, because Aviva
also has a presence in Topeka, Kansas, as it
is the location of a predecessor company,
American Investors Corp.
Waetke said the predecessor company
had a banking relationship with Columbian Bank and Trust to process a variety
of banking services including check clearing, processing electronic funds transfers,
and accepting incoming wire transfers.
Columbian was one of several institutions
that provided banking services for Aviva
at that time.
Although not specifically broken out,
the loss stemming from Columbian’s collapse was reflected in the company’s year-end financial statement in 2009.
Where Aviva Went Wrong
Sam Caligiuri, a partner at Day Pitney LLP
in Hartford and head of the firm’s insurance regulation and transaction practice
group, said that Aviva’s error was in classifying its funds in an operating account instead of stating explicitly that they were for
an insurance company separate account.
Caligiuri’s comments were based on a
decision Aug. 16 by a panel of the 10th U. S.
Circuit Court of Appeals, which backed
the the Federal Deposit Insurance Corporation’s determination that the deposits
were held in two corporate, rather than
separate, accounts.
Caligiuri noted that this is the first case
he can recall where this type of loss has occurred, and said that his primary job is working on separate accounts and related issues.
“Insurance company separate ac-
counts are very important because they
allow insurance companies to protect the
assets of separate accounts contract hold-
ers, which support various annuities prod-
ucts from the insolvency of the insurance
company,” he said.
