Beard, Jackson, Attorneys for Appellant. Johnson, Jackson, Attorneys for Appellee. Coleman presiding, entered an order granting the Bank partial summary judgment on liability and held that the pre Act applied and that the GIC was covered thereunder. Aggrieved by the circuit court's decision, the Bank appeals to this Court and raises the following issues: The following is a summary of the undisputed facts in this case. The Plan, adopted January 1, , was a defined benefit employee pension plan within the meaning of 29 U.
In , the Plan purchased a single premium guaranteed investment contract bearing No. The GIC is an unallocated annuity contract within the meaning of Miss. On October 9, , MFC Services terminated the Plan although distribution of the Plan assets to its beneficiaries was not completed until December On November 18, , ELIC for the first time failed to meet its contractual obligations under the GIC by missing the interest payment due on that date.
The GIC was assigned to the Liquidating Trust on that date, and all other Plan assets were distributed as of that date. Each former participant in the Plan received a certificate of participation in the Liquidating Trust, representing his interest in the GIC, as part of the termination and distribution of Plan assets.
The Liquidating Trust is independent of the Plan and the Plan's former trust, and the Plan retains no interest in the Liquidating Trust. The restructuring permanently adjusted the account value or benefit payment of each ELIC contract.
December 6, , [was] the date on which Executive Life was placed into liquidation and as a result this Association became obligated to certain Mississippi policyholders of Executive Life. As a result, this Association has no statutory responsibility for the amount of the shortfall. Also, in the case sub judice, the parties stipulated to the above undisputed facts, and thus, the only questions before the trial court were questions of law. City of Gulfport, So. The Bank contends that the circuit court mistakenly relied upon foreign decisions and ignored this Court's clear ruling in Mississippi Insurance Guaranty Association v.
Laws codified as amended at Miss. The Legislature stated the purpose of the original Act as follows: See Act of April 4, , ch. In Vaughn, this Court was presented the question of whether an accident and health insurance policy was excluded from coverage under the Mississippi Insurance Guaranty Act pursuant to Miss.
In reaching this conclusion, the Vaughn Court stated that the MLHIGAA enacted in would provide coverage of the accident and health insurance policy at issue, and the Court went further to state in a footnote that: The policy and type of insurance at issue here is clearly within the coverage of this latter act.
The only problem, however, is that Vaughn's policy was issued in May of The new act became effective April 9, , and has no effect upon policies written prior to that date. The Bank correctly relies on the Vaughn Court's statement to contend that, analogously, the act in existence at the time the policy was issued should govern whether the GIC is covered by the MLHIGA and not the version of the act after the amendments because they did not become effective until July 1, We are not convinced.
Expressly relying on the statutory requirement of liberal construction 1 , the Gandy Court enforced the guaranty even though the policy had been issued and the claim submitted before the effective date of the Act.
In rejecting the argument that such application would be a retroactive application of the law, the Gandy Court stated: The controlling factor is the insolvency of the insurance company after the effective date of the act and not when the claims arose. In so holding we are carrying out the object and the purpose of the act and construing it in accordance with the intention of the legislature, although such construction may not be in accordance with the strict rules of English grammar.
Furthermore, we are not giving retroactive application to the act, but merely drawing on antecedent facts for its operation and to carry out its purpose. Hilti Retirement Savings Plan, P. In Gandy, this Court showed that it was not bound by the constructions of foreign courts.
There, the Mississippi Insurance Guaranty Association relied upon a restrictive interpretation of an identical statute by the high court of Ohio in Smith v. This Court rejected the Ohio interpretation and relied upon a liberal construction instead.
We rest on Gandy and Vaughn and find that coverage did exist. Therefore, this case is reversed and remanded. The Bank asserts that the circuit court erred by concluding that Miss. The Bank contends that the circuit court erred in concluding that the beneficiaries of the Plan were protected by the PBGC where the PBGC had made no payments for statutorily guaranteed benefits and will make no payments for losses suffered by reason of the Liquidating Trust's inability to meet its full contractual and fiduciary obligations.
The Bank further relies on the Legislature's stated purpose in Miss. See generally, 29 U. The PBGC receives termination insurance premiums from employers and protects beneficiaries of a qualified pension plan should the plan become insolvent and be unable to meet obligations to beneficiaries. The Plan was undisputedly protected by the PBGC from losses that might have made the Plan unable to meet its statutory minimum obligations to Plan beneficiaries.
The Plan was protected throughout final distribution of Plan assets, but because the Plan was able to meet its minimum obligation to Plan beneficiaries, the PBGC was not required to make payments to the Plan or Plan beneficiaries.
Inter-American was later declared insolvent, and as a result, the plaintiffs sought coverage of its losses by the state guaranty association. Thus, the Michigan Court of Appeals was presented with the identical issue as in this case of whether a GIC purchased by a pension plan from an insurance company that later becomes insolvent is excluded from coverage by the state guaranty association if the pension plan is a qualified pension plan that receives protection from the PBGC even though the PBGC has made no payments to the pension plan to compensate for its losses.
The Michigan Court of Appeals stated that the critical inquiry when applying M. The court of appeals stated the protection provided by the PBGC as follows: When a pension plan is terminated, the PBGC may be called upon to provide benefits to the plan's beneficiaries. Congress has established a maximum guaranteed benefit that is covered by the PBGC. Congress only intended that the PBGC guarantee the payment of benefits to participants and beneficiaries of pension plans that have been terminated.
The PBGC benefits are available only if the plan itself fails. Until the plans terminate, the plan sponsors continue to maintain the responsibility to fund the plans to provide pension benefits to participants. The plan sponsors can terminate the plans under the distress termination provisions and rely on the PBGC to pay guaranteed benefits to the plan participants if the responsibility to fulfill the requirements to fund the pension plans would result in an unreasonably burdensome economic cost.
However, it was not the Legislature's apparent intention that the plaintiffs look to the state guaranty fund to provide benefits for the failure of an asset within the plans. Merriam Webster's Collegiate Dictionary Finally, the Circuit Court wrongly equated the intent of Congress with the intent of the Mississippi Legislature.
Congress intended to protect only certain minimum benefits, not the full contractual and fiduciary obligations of a pension plan. Hence, this case is reversed and remanded. Because we have reversed and remanded on other issues raised by the Appellant, there is no need to analyze the merit of this claim.