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RALEIGH, N.C.-Two North Carolina state agencies are asking a CIGNA Corp. subsidiary to turn over the Tillinghast actuarial report on the financial strength of CIGNA's new runoff facility as part of their prosecution of the unit for allegedly violating a state law during CIGNA's reorganization. Defenses that CIGNA unit Insurance Co. of North America has raised in the case and the state's resulting request for the actuarial report and other information led to the postponement of a Feb. 18 hearing on CIGNA's reorganization, said Peter A. Kolbe, general counsel for the North Carolina Insurance Department. Insurance Commissioner Jim Long has rescheduled the hearing for April 5. Mr. Kolbe and Assistant Attorney General Tom Zweigart are co-prosecuting the case against INA. Mr. Long, who has not taken a position in the case, is presiding over the proceeding. CIGNA last year split its property/casualty insurance business into an operation for ongoing business and a separately capitalized runoff facility for long-tail and other liabilities. Messrs. Kolbe and Zweigart contend that INA violated the state's Assumption Reinsurance Act when, without obtaining prior policyholder consent, it split in two in order to "transfer" most of its liabilities to a non-insurance entity that then was folded into the runoff facility. The portion of the divided INA that retained in-force business became part of CIGNA's active operation. CIGNA officials have maintained that the transaction was a merger, which does not require policyholder consent.

Mr. Kolbe said CIGNA has raised the defense that North Carolina regulators should "give full faith and credit" to Pennsylvania Insurance Commissioner Linda S. Kaiser's approval of the reorganization. "We said it's hard to do that without having full documentation," which includes the Tillinghast report, Mr. Kolbe said. He and Mr. Zweigart have asked INA to turn over the report by early this week.

A CIGNA spokesman would not comment beyond saying the postponement was routine and that both sides requested it only to give themselves more time to prepare their respective cases.