Court Opinion

ID: 9576953
Source: CourtListenerOpinion
Date Created: 2023-08-21 21:30:16.927142+00
Date Added: 2024-06-11T13:19:44.939225
License: Public Domain

WATT, Justice,
with whom SUMMERS, Vice Chief Justice and LAVENDER, Justice, join dissenting.
I.
In attempting to glean the intent of the Legislature from the language of the 1988 Oklahoma Act its terms should be compared to those of the National Association of Insurance Commissioners’ Life and Health Guaranty Association Model Act of 1985, and to the versions of the Model Act passed by some of our sister states.
The Model Act defines the term “unallocated annuity contract,” creates an unallocated annuity contract account, and expressly provides coverage under the Model Act for unallocated annuity contracts. More than thirty states and the District of Columbia have either incorporated the definition of an “unallocated annuity contract” in their versions of the Model Act, or have said that a “guaranteed investment contract” is an “unallocated annuity contract, ” thereby expressly excluding them from coverage.1 The Oklahoma Legislature has done neither.
Most states that have passed the 1985 version of the Model Act have expressly included coverage for unallocated annuity contracts. Some, though, have excluded such coverage. Several states that have excluded unallocated GICs, or other annuity contracts from coverage have also excluded the premiums collected on such contracts from assessment under the Act.
California passed an amendment to its act that generally excluded most GICs and unallocated annuity contracts from coverage, but expressly included coverage for GICs, the definition of which could have been only *1115those GICs sold by Executive Life Insurance Company. Cal.Ins.Code § 1067.02(b)(2)(E) (1994). Of greater interest, however, is the fact that the California statute expressly prohibits a seller of unallocated annuity contracts from offering such contracts for sale to an employer unless the insurer has “disclosed to the employer, and employees in writing in a conspicuous manner that the contract is not covered by the [guaranty] association.” Cal.Ins.Code § 1067.02(e) (1994). Similarly, both the Kansas statute, Kan.Stat.Ann. § 40-3005© (1986), and Florida act, Fla.Stat. § 631.713(3)G) (1995), expressly exclude premiums from unallocated annuity contracts from assessment by the guaranty association.
To the extent that premiums from unallocated annuity contracts are annuities, the Oklahoma Act makes them subject to assessment because the definitions section of the Oklahoma Act, 36 O.S.1991 § 2024 11, excludes from the definition of the term “premium” neither GICs nor any other kind of unallocated annuity contract.
The majority relies on. a recent case that construed a form of the 1985 version of the act as it applied to GICs sold by an insurer other than Executive Life Insurance Company. In Bennet v. Virginia Life, Accident and Sickness Insurance Guaranty Association, 251 Va. 382, 468 S.E.2d 910 (1996), the Supreme Court of Virginia held that the exclusion of policies “not issued to and owned by an individual, except to the extent of (I) any annuity benefits guaranteed to an individual by an insurer under such contract or certificate ...,” excluded the GICs involved there. The opinion also held that those GICs were not annuities. There has been unanimous agreement among the opinions we have found that Executive Life Insurance Company GICs are annuities. Board of Trustees of the Maryland Teachers & State Employees Supplemental Retirement Plans v. Life and Health Insurance Guaranty Corporation, 335 Md. 176, 642 A.2d 856 (1994); and Uni-sys Corporation v. Pennsylvania Life and Health Insurance Guaranty Association, 667 A.2d 1199 (Pa.Cmwlth.1995). The Virginia opinion neither, analyzed the differences between the Virginia statute and the Model Act, nor even recognized that a Model Act exists. For the reasons discussed in this dissent I believe that this Court should decline to accept the Virginia Court’s analysis of this issue.
The Model Act defines “unallocated annuity contract” as “any annuity contract or group annuity certificate which is not issued to or Owned by an individual by an insurer under such contract or certificate.” The Oklahoma Act includes neither the foregoing definition, nor the term “guaranteed investment contract.” Title 36 O.S., 1991 § 2025 B 2 g, however, provides, “This act shall not provide coverage for:”
any annuity contract or group annuity certificate which is not issued to and owned by an individual, except to the extent of any annuity benefits guaranteed to an individual by an insurer under such contract or certificate.
The interpretation of this language is the crux of this appeal. Does the foregoing language describe the Executive Life Insurance Company GICs at issue here? The answer is that the Act is ambiguous because GICs are not mentioned in the Oklahoma Act. The purpose of the Act is to protect insureds against loss because of the “failure in the performance of contractual obligations under life and health insurance policies and annuity contracts.” The Executive Life GICs were annuity contracts, so the ambiguity of the Act should be resolved in favor of the Plan’s members. The GICs should be held to be covered by the Act because they were not expressly excluded from coverage.
The vagueness of the quoted language, coupled with the Act’s clearly stated policy to protect annuitants from loss through the failure of life and health insurers2 convinces me that the Oklahoma Legislature did not intend to exclude from the protection of the act the Executive Life Insurance Company GICs. Those GICs were bought with the funds of Hilti’s plan participants, and the premiums *1116used to buy them were subject to assessment under the Act. Plan participants had the right to direct their investments in the GICs. These GICs were clearly annuities. Given these circumstances, I believe that had the Legislature intended to exclude these GICs, which were bought with the funds of plan participants who bore the ultimate risk of loss, it would have said so. The Legislature would have expressly excluded the premiums from such contracts from assessment had it intended that GICs not be covered under the Act. There is nothing in the 1988 amendments to the Oklahoma Act to convince me that the Oklahoma Legislature intended to deprive Hilti Plan participants of coverage of the GICs BancOklahoma Trust Company bought for their benefit.
The majority’s decision turns legislative construction on its head by interpreting an ambiguous statute in a way that hurts the very people the legislation was passed to help.
II.
At a minimum, I would remand this ease for trial. The Plan should have the opportunity to present further proof on the issue of whether premiums it paid on the Executive Life GICs were subject to assessment and whether it paid any assessments on them. The record is unclear on the issue of just what the Plan’s liability for assessments against the GIC premiums was. To deprive the Plan of the opportunity to develop further facts on this critical issue serves only to compound the unfairness of the majority opinion.
I dissent.

. The statutes I have found that incorporated a definition of the term "unallocated annuity contract” in their Life and Health Guaranty Acts, or reciting that a "guaranteed investment contract” is an "unallocated annuity contract, are from the following states: Arkansas, Alaska, California, Connecticut, Delaware, Georgia, Hawaii, Idaho, Illinois, Iowa, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Michigan, Minnesota, Missouri, Montana, North Carolina, North Dakota, Ohio, Oregon, Pennsylvania, Rhode Island, Tennessee, Utah, Vermont, Washington, and West Virginia.

. The purpose of the Act is to protect insureds from loss because of “failure of performance of contractual obligations under life and health insurance policies and annuity contracts.” 36 O.S. 1991 § 2022 A.