Randall & Quilter Investment Holdings (R&Q) has announced that Oklahoma’s insurance commissioner has approved the insurance business transfer (IBT) of a portfolio of Sentry Insurance’s reinsurance policies to National Legacy Insurance Company (NLIC), a wholly owned subsidiary of R&Q. The policies relate to Sentry’s involvement as a member of the Excess & Casualty Reinsurance Association (ECRA) pool.
The IBT application reviewed by the commissioner included extensive financial information, a plan for how the transaction will be communicated to stakeholders, and an independent expert’s report that concluded the transaction would not have a “material adverse effect on stakeholders,” R&Q said. The transfer of Sentry’s ECRA pool insurance liabilities to NLIC will not change policy terms, rights and obligations, or the way the policy is administered, according to R&Q. The commissioner’s approval allows the parties to petition the Oklahoma District Court for final approval.
Oklahoma’s IBT legislation, modeled on the Part VII transfer process in the UK and the European Union, provides a mechanism for insurers to legally transfer reinsurance business to another company following consultation with stakeholders and a court hearing.
“We are pleased to have completed this important step in the Oklahoma IBT process, and we will now focus our efforts on engaging with stakeholders and obtaining a successful court outcome,” said Mike Walker, head of legacy at R&Q. “We believe this innovative solution will become increasingly common as a tool to transfer liabilities effectively between insurance companies. It will prove to be of particular use to those entities looking to exit lines of business or dispose of legacy portfolios in the US. The oversight of the commissioner and the court, coupled with the rigor of the independent review and communication processes required under the legislation, provides a robust framework for stakeholder protection.”
Source : Insurance Business | Insurance News