Heritage National Managers Looking For Financing, Trying To Keep Company Out Of Receivership

"We're prefer to have the case heard in the courtroom," Reid says.

Heritage National writes group life and group accident and health policies. It provided health insurance for more than 5,000 Oklahoma residents and thousands of people in Texas.

The Texas Department of Insurance and the Texas Life, Accident, Health, and Hospital Service Guaranty Association negotiated an agreement a year ago that called for Heritage National to take over Medical Community Insurance Company, Houston, a small, 3-year-old, physician-owned insurance company that was placed in temporary receivership in August 2000, according to a February 2001 report from Standard & Poor's, New York.

Heritage National agreed to voluntary supervision by the Oklahoma department in late June. At the time, it had negative capital and surplus of $106,825, Fisher says.

The department placed the company in temporary receivership July 27, pending an August hearing. However, at the August hearing, the court said it did not have enough evidence to place Heritage National in receivership, according to local press reports. The court did allow the voluntary supervision to continue.

S&P says it has assigned an 'R' financial strength rating to Heritage National, indicating that the company is now under regulatory supervision.