Because inaccurate information was supplied to The Sun, yesterday's editions inaccurately stated the policy amount of insurance sold by Mutual Benefit Life Insurance Co. in Maryland. Mutual Benefit has $1.12 billion of life insurance in effect in the state, including about $966 million in group insurance and $158 million in individual life insurance coverage.
The Sun regrets the errors.
Mutual Benefit Life Insurance Co. has $9.6 billion worth of insurance policies outstanding in Maryland, but competitors and state officials agreed that the impact on Marylanders of the New Jersey-based insurer's failure will be slight.
"My overall impression is that people won't lose money," said Joseph E. Blair, president and chief executive of the Baltimore Life Insurance Co., a competitor of Mutual Benefit's. But he added, "They may not be able to get at it for a while."
FOR THE RECORD - CORRECTION
A spokesman for the Maryland Insurance Division said Newark, N.J.-based Mutual Benefit, which is expected to be taken over today by New Jersey insurance regulators, has about 7,500 outstanding policies in Maryland.
The spokesman, Charles LaMason, said Mutual Benefit ranks 32nd in the amount of life insurance issued in the state. "I don't think [the company] was anywhere near the biggies," Mr. LaMason said.
The company has a group insurance sales office in Annapolis, but for several years it hasn't had agency offices selling individual policies in Maryland, said Peter Grippi, a Mutual Benefit executive in the Annapolis office.
Mr. Grippi said that there were no lines of consumers trying to cash in their policies in Maryland yesterday, in contrast with the scene at the company's headquarters. But he admitted that he was concerned.
"There isn't a financial institution in the world that can stand anything like everyone showing up on the same day and saying, 'Give me my money,' " he said.
But state officials and a Mutual Benefit executive pointed out that three layers of protection stand between the company's customers in Maryland and any loss of money or protection:
* About $6.6 billion of the Maryland policies are in group insurance plans, said Mr. LaMason. His figures are from the end of 1990, the most recent data available.
The group insurance division is highly profitable, said Mr. Grippi. New Jersey Insurance Commissioner Samuel F. Fortunato is expected to order that the division be spun off as an independent company, which would be solvent and able to protect consumers' interests. "They [group insurance customers] will be protected," Mr. Grippi said.
* Many of the individual policies have paid-in cash value and will be attractive to other insurance companies, which could buy them from Mutual Benefit or its conservators and maintain consumers' protection, said Joseph Petr, director of the Maryland Life & Health Insurance Guaranty Corp. "These policies are worth something," he said.
* The state's licensed insurance companies co-sponsor the Guaranty Fund, which Mr. Petr said guarantees the claim-paying ability and the cash value of life insurance policies and fixed annuities.
Since the group insurance policies are likely to be maintained by the newly independent group insurance division, Mr. Petr said, the insurance fund would have to deal only with the individual life insurance policies that aren't sold to other companies.
The cash value of those policies is much less than $3 billion, but no definite figures on their value were available, Mr. Petr said. The fund can raise up to $50 million a year in premiums.