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N.J.S.A. 17B:32-31 to -91, mandates that all policyholders within a class be treated equally with no subclasses created. The rehabilitation plan preventing appellants from withdrawing their respective annuity funds furthers the RLA's undisputed intent of precluding deferential treatment among insureds."> 297 N.J.Super. 179"> Original

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(NOTE: The status of this decision is Unpublished.) Original WP 5.1 Version

(NOTE: This decision was approved by the court for publication.) This case can also be found at 297 N.J. Super. 179.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION A-1482-93T3 IN THE MATTER OF THE REHABILITATION OF MUTUAL BENEFIT LIFE INSURANCE COMPANY, a Mutual Insurance Company of New Jersey. _________________________________________________________________ Argued November 13, 1996 - Decided February 4, 1997 Before Judges Muir, Jr., Kleiner, and Coburn. On appeal from the Superior Court of New Jersey, Chancery Division, Mercer County. Joseph J. Fleischman argued the cause for cross-appellant California Institute of Technology (Hannoch Weisman, attorneys; Mr. Fleischman, on the brief). Cross-appellant Edward H. Greenberg filed a pro se brief. Steven R. Klein argued the cause for cross respondent Elizabeth Randall, Rehabilitator of Mutual Benefit Life Insurance Company (Peter Verniero, Attorney General, attorney; Cole, Schotz, Meisel, Forman & Leonard, Special Counsel; Cadwalader, Wickersham & Taft, Special Counsel; Joseph L. Yannotti, Assistant Attorney General, Michael S. Meisel, and Mark C. Ellenberg, of counsel and on the brief; Sharon M. Hallanan, Deputy Attorney General, David M. Kohane, Peter M. Dodson, Joseph A. Rutigliano, Jr., Wendy F. Klein, and Mr. Klein, on the brief). The decision of the court was delivered by MUIR, JR., J.A.D. This appeal is one discrete facet of the extensive litigation emanating from the potential insolvency of Mutual Benefit Life Insurance Company (MBL). Confronted with a drastic reduction in capital surplus created by poor quality investments and over concentration in real estate assets that experienced precipitous declines, MBL's Board of Directors consented to MBL's takeover by the Commissioner of Insurance. On July 16, 1991, Judge Levy signed a consent order with temporary restraints naming the then Commissioner of Insurance the Rehabilitator of MBL pursuant to the Life and Health Insurance Rehabilitation and Liquidation Act (RLA). N.J.S.A. 17B:32-31 to -91. The order vested the Commissioner with all powers authorized by the RLA and,

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among other things, generally restrained insureds from withdrawing funds held by MBL pursuant to policies, annuities, and other contracts. An effect of the order was to preclude policyholders' efforts to withdraw funds following media disclosures concerning MBL's tenuous capital surplus position. A company with asset book value of nearly $14 billion in 1991, MBL experienced $500 million in withdrawals in the first half of 1991, with $500 million more predicted if the restraints had not issued. The withdrawals left MBL's capital surplus perilously low. This appeal focuses on the failed efforts of California Institute of Technology (Caltech) and one of its professors, Edward H. Greenberg, to withdraw their respective annuity funds from MBL just prior to the entry of the July 1991 restraining order. Caltech had a group annuity contract with MBL to fund an annuity taxable in accordance with 26 U.S.C.A.

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