Municipal Insurance on brink

Municipal Insurance Co. of America, located at 85 W. Algonquin Road in Arlington Heights, said it will be forced to liquidate after receiving notice from the Illinois insurance regulator of a $4.1 million "impairment" in its required surplus as of June 30.

Municipal Insurance specializes in group health insurance and has few employees.

The notice, issued Oct. 3 by the state Department of Financial and Professional Regulation's Division of Insurance, ordered the company to correct the impairment within 30 days.

"They need to come up with $4,136,125 in order to meet our standard requirements or we'll have to shut their doors," said James M. Hanson, acting assistant deputy director of the Division of Insurance.

The deadline is Nov. 2, but the company Thursday held out no hope of complying.

In a press release, the company said it is likely it "will be deemed insolvent and no assets will remain after its liquidation" for distribution to shareholders of the company."

Steven Lange, acting chief executive officer, declined to comment about the notice.

The company was formed in Chicago in 1946 as the successor to the Municipal Employees Insurance Association. Over time, the company has underwritten individual life, group and credit life insurance, annuities, health insurance and dental insurance, according to its Web site, www.micacare.com.