Insolvency, Restructuring and Run-Off

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UK insurer Admiral Group plc has successfully used the procedure contained in Part VII of the Financial Services and Markets Act 2000 to transfer business – a motor book – from its Lloyd’s Syndicate  to Admiral Insurance Company and then close the syndicate. 

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Read More Part VII FSMA 2000: Admiral Group plc uses Part VII to close Lloyd’s syndicate

The case of Law Society v Dixit Shah (2007) EWHC 2841 (Ch) arose from the intervention of the Office for the Supervision of Solicitors into an association of firms owned by Dixit Shah which traded under “the BJ Brandon Group” name. The Law Society alleged that the OSS discovered that around £12.5 million of client money had been misappropriated by Mr Shah. 

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Read More Third party claims: A decision of the High Court clarifies the law with regard to claims under the Third Party (Rights against Insurers) Act 1930

Executive Life Insurance Company of New York (ELNY) was placed into rehabilitation in 1991 after affiliated companies became insolvent and concerns about its future solvency arose.  The rehabilitation plan adopted in 1992 involved the transfer of much of ELNY’s business to another carrier; however, ELNY in rehabilitation retained substantial assets and continued payment on certain annuities, with the bulk of the payout going to structured settlement annuitants that had received long-term and/or lifetime annuities as settlements in personal injury lawsuits. 

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Read More Spitzer, NYLB Announce Proposed Resolution of Projected Shortfall in Executive Life Insurance Company of New York Rehabilitation

After a lengthy legal battle between New York’s Comptroller and the Superintendent of Insurance, New York’s highest court has held that the Comptroller may not exercise its audit powers over the New York Liquidation Bureau (NYLB) and may not audit funds/assets under the NYLB’s control. …
Read More New York Decision on NYLB Prohibits Comptroller Audit, Expounds on Private Role of Liquidator

Recently, a New York state court gave the New York Liquidation Bureau (“NYLB”) permission to notify more than 300,000 creditors of Union Indemnity Insurance Company (“Union Indemnity”) that it plans to make the first distribution from the insolvent property casualty insurer’s estate. …
Read More New York State Court to Determine Whether Distribution from Insolvent Union Indemnity Estate Should be Permitted

Following up on our post last month, on July 24, 2007, a bipartisan optional federal charter (OFC) bill was proposed in the House by Reps. Melissa Bean (D-IL) and Ed Royce (R-CA), serving as a companion bill to the previously-filed Senate version, both of which are entitled the National Insurance Act of 2007. …
Read More National Insurance Act/Optional Federal Charter Legislation Reintroduced in House

On July 12, 2007, the Massachusetts Supreme Judicial Court held that, where a vehicle causing an accident is owned by a governmental entity and is insured by an insolvent insurer, the Massachusetts Insurers Insolvency Fund is not obligated to compensate the injured individual unless and until the injured individual’s own uninsured motor vehicle coverage has been exhausted. 

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Read More Massachusetts Insurers Insolvency Fund Not Implicated Until Uninsured Motor Vehicle Coverage Is Exhausted

We are following a unique case pending in the U.S. District Court for the Northern District of Florida, where Universal Health Care Insurance Company (UHCIC) has attempted to remove to federal court the receivership proceedings commenced in Florida state court by the Florida Department of Financial Services (DFS).  The DFS has moved to remand the matter to state court, briefs have been filed, and the matter awaits a ruling from the court. 

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Read More Florida Insurer’s Removal of Receivership Proceeding to Federal Court Under Review

On May 24, 2007, optional federal charter (OFC) legislation was reintroduced into the Senate as the National Insurance Act of 2007 (S. 40) (NIA), co-sponsored by John Sununu (R-NH) and Tim Johnson (D-SD).  A similar bill is expected to be reintroduced into the House by Ed Royce (R-CA) in the coming weeks. 

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Read More National Insurance Act/Optional Federal Charter Legislation Reintroduced in Senate