ISC Financial Corp., parent company of a troubled life insurance firm and a large thrift institution, has filed a chapter 11 bankruptcy petition.
The company said also that it expects the Missouri Insurance Department to determine that the reserves of its subsidiary, Old Security Life Insurance Co., are inadequate and that the company is therefore statutorily insolvent. The insurance company is expected to be placed under a state conservatorship, company officials said.
Old Security's operations ran aground last year after the firm had difficulties with group insurance policies it had sold to the Teamsters Union Central States, Southeast and Southwest Areas Health and Welfare Fund. Old Security reinsured the policies with several companies connected to Joseph Hauser. Hauser is a California-based insurance promotor whose dealings have been the subject of several investigations in recent months.
As a result of its Teamsters business and the subsequent reinsurance business, Old Security is involved in a complex series of legal actions.
Besides Old Security, ISC Financial Corp. owns Anchor Savings and Loan Association, the second largest S&L in Kansas. But ISC officials said Anchor's operation are completely separate and that the S&L's assets can be tapped by ISC only with permission of the Federal Home Loan Bank Board.
ISC Financial began life in 1924 as a small loan company in Kansas City. For most of the company's history the loan business has been the major part of the firm's operation. But earlier this year the ISC sold its finance business to Beneficial Corp.
In its listing of assets and liabilities contained in the bankruptcy petition ISC said it had total assets of $54.9 million and total liabilities of $41.2 million. The company said it has 4.050 common shareholders with about 1,672,100 shores outstanding.
A group of ISC shareholders earlier this year brought suit against several company officials and former officials alleging mismanagement.