Pacific Mutual’s Innovative Record

Pacific Mutual Life Insurance Co. has continued to come up with new ideas for life insurance and health coverage policies and find ways to get top results in managing assets. It also has been an active philanthropist, donating to worthy causes and calling on others for additional support. Among its innovations, Pacific Mutual:

* Helped to build CAPP Care, the nation’s first and largest preferred provider organization. Pacific Mutual provided venture capital for CAPP Care in 1984 and later helped to bring in five other insurers as investors. The Fountain Valley PPO offers customers a choice of numerous private physicians who agree to abide by cost-containment terms.

* Entered a joint venture in 1989 with Health Plan of America, a health maintenance organization, to offer a one-stop shopping product. Subscribers can elect each year whether to use the HMO and its doctors or to go to private doctors of their choice under group health plans. Health Plan has since been acquired by Pacificare Health Systems Inc. in Cypress, which continues to offer the option.

* Joined with four other carriers in 1991 in the state’s Major Risk Medical Insurance Program, which extends insurance to those who have uninsurable medical conditions, such as AIDS or heart ailments. The state subsidizes the program through proceeds from the added tobacco tax approved by voters in Proposition 99.

* Formed a joint venture in 1989 with Mutual of New York Life Insurance Co. to administer employee benefits under the group health policies offered by both companies. MONY later decided to leave the group health insurance field, selling its business to Pacific Mutual. The subsidiary, Employee Benefits America in Fountain Valley, is still 10% owned by MONY.

* Formed an investment management subsidiary, Pacific Investment Management Co., in 1971. Other insurance firms have followed suit, but PIMCO remains a leader, especially in pension fund management.

* Brought in well-known outside money managers, like Capital Guardian and Bankers Trust, as experts to help Pacific Mutual manage certain specialized pools of assets for new products. The independent management is for the company’s variable products, which allow policyholders to select the type of securities in which they want to invest their premiums.

* Became the first corporate sponsor of the annual AIDS Walk Orange County. Since 1985, the company and its small Pacific Mutual Foundation has provided more than $200,000 for education programs about the disease, including $10,000 a year for the annual AIDS walk. The company also used a grant to persuade 10 Orange County colleges to establish an education program about AIDS.

* Organized the first meeting of Orange County business executives in 1987 to discuss and develop an AIDS education program for the workplace, believed to be the first such program in the nation. The company later helped the American Foundation for AIDS Research publish its nationwide manual on AIDS in the workplace.

* Developed the infamous “non-cancelable disability income policy,” a product that prohibited the firm from canceling policies if customers became uninsurable. That 1918 product also was the last of its kind. Poor underwriting, inadequate reserves and mounting claims on those policies during the Great Depression led to the state’s takeover of Pacific Mutual in 1936 and a 23-year reorganization period.

* Was the first company west of the Mississippi River to install a large-scale mainframe computer to help keep track of business.