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CLASS ACTION SUIT AIMS TO PROTECT PENSIONS OF UNISYS EMPLOYEES

 HARRISBURG, Pa., May 4 /PRNewswire/ -- Attorney General Ernie Preate Jr. and Pennsylvania Insurance Commissioner Cynthia M. Maleski today joined in a class action suit they say is aimed at protecting the pensions of about 6,000 Unisys employees and retirees in Pennsylvania.
 Preate and Maleski said this could be a test case in their effort to protect pensions of other Pennsylvania residents whose pension funds are invested with Executive Life Insurance Co.
 Executive Life is a California-based life insurance company which was placed under the control of the California insurance commissioner and declared insolvent in December 1991.
 "We are asking Commonwealth Court to rule that certain pension benefits purchased for Unisys employees in Pennsylvania from the now insolvent Executive Life are covered by our state insurance guaranty fund," Preate and Maleski said in a joint statement.
 "Such action would ensure that Pennsylvania employees' pensions are not placed in jeopardy by Executive Life's insolvency," they said.
 At issue are pension contracts sold by Executive Life under the name "group limited premium deposit pension contracts," according to the suit.
 Preate and Maleski said the Insurance Department considers the Executive Life contracts to be "annuity contracts" which are covered by the guaranty fund administered by the Pennsylvania Life and Health Insurance Guaranty Association (PLHIGA).
 The guaranty fund was created by the Legislature in 1978 under the Life and Health Insurance Guaranty Association Act to reimburse policyholders for certain losses in cases of insurance company failures.
 The fund covers up to a limit of $100,000 for cash values or $300,000 for all benefits.
 But PLHIGA to date has refused to extend coverage of the fund to the Pennsylvania employees who depend on these contracts for benefits, according to the suit.
 A second issue is an argument by Preate and Maleski that not only are "group limited premium deposit pension contracts" covered by PLHIGA, but that each Pennsylvania resident under the pension plan is entitled to the full limit of benefits available under the guaranty fund act.
 The suit notes that the Executive Life contracts in which the Unisys funds were invested were valued at more than $178 million as of March 1991.
 Preate and Maleski joined with Unisys Corp. (NYSE: UIS), Blue Bell, Montgomery County, in filing the suit in Commonwealth Court. Also listed as plaintiffs are Raymond W. Ross Jr. of Glenside, Montgomery County, a former Unisys employee, and Mellon Bank, N.A., of Pittsburgh, trustee of the Unisys Employee Savings Thrift Trust.
 PLHIGA, which is named as defendant, is composed of life and health insurance companies operating in the state. Money for the guaranty fund is raised through assessments on the insurers.
 Preate and Maleski said an undetermined number of other Pennsylvanians may be covered by pension funds that invested in the Executive Life contracts. They said the court's decision ultimately could affect those individuals as well.
 /delval/
 -0- 5/4/93
 /CONTACT: Amy Dugan, press secretary of the Pennsylvania Insurance Department, 717-787-3289, or Jack J. Lewis, Assistant Press Secretary of the Office Of Attorney General, 717-787-5211/
 (UIS)


CO: Pennsylvania Attorney General's Office; Pennsylvania Insurance
 Department; Unisys Corp. ST: Pennsylvania IN: INS SU:


MJ -- PH025 -- 4457 05/04/93 15:29 EDT
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Publication:PR Newswire
Date:May 4, 1993
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