Long-Bankrupt Health Insurer’s Claims Settled

The final chapter was written Thursday in the 1982 bankruptcy of Tarzana-based American Benefits Ltd.--and it may mean a happy ending at last for several thousand workers still holding unpaid health insurance claims.

Lawrence A. Diamant, the Los Angeles attorney who supervised liquidation of the company, announced a tentative settlement of $2.75 million on behalf of “several thousand health-care claimants” who had filed for benefit payments between August and October of 1982, the last three months before American Benefits was declared insolvent. A previous settlement was reached with Associated International Insurance Co., which agreed to pay claims filed for the preceding three months.

The settlement requires approval by judges in the two courts involved--U.S. Bankruptcy Court and Los Angeles Superior Court, Diamant said. Hearings are scheduled for early August.

The latest settlement is with Security Assurance Co., which had refused to accept responsibility for claims filed from August through October, 1982. Diamant’s law firm, acting as bankruptcy trustee, then sued Security in Superior Court. The trial was under way when the settlement was reached, said Elliott Lisnek, who handled the case for Robinson, Diamant, Brill & Klausner.

“The exact amount to be paid to the claimants is unknown, but will be determined after all qualified claims have been reviewed,” Lisnek said. That process may take up to six months.

Persons who have already filed claims should receive details of the settlement in the mail along with notice of a court hearing, Diamant said, and newspaper advertisements will seek to reach remaining potential claimants.