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Order of Liquidation (Executed October 3, 2001) Petition for Liquidation (Contains Order of Liquidation and Explanation of Reasons for Liquidation) Press Release from the Insurance Commissioner of Pennsylvania (October 3, 2001) Official Statement by the Insurance Commissioner of Pennsylvania (October 3, 2001) Guide to Liquidation by the Insurance Commissioner for the Commonwealth of Pennsylvania (October 3, 2001)
Comments on Reliance Insurance Company Liquidation Everyone, The September 11, 2001, terrorist attack dealt a blow to Reliance that it could not recover from. Since Reliance had largely stopped writing insurance policies last year, the reasons are more complex than claim volume. Reliance has 5,100,000,000 in reinsurance assets. (It also has other assets, but those are not easily liquidated.) Prior to September 11, 2001, reinsurers had been stretching out payment to Reliance. Several of those reinsurers and their administrators were headquartered in the World Trade Center. The resulting, tragic loss of life, coupled with loss of property and records, stretched slow payments to the breaking point. Reliance also holds 11,200,000 shares of stock in Symbol Technologies, Inc. Symbol Technologies has declined from $26 a share in May to $10 a share in September, 2001. At 38% of its value only six months ago, that was a loss of $179,200,000. Certain states, including California, refused to release statutory deposits. That amounted to more than $400,000,000. In addition, Reliance Group Holdings held onto $95,000,000 in tax returns. Reliance's first quarter financials, which were only completed last week, showed that its liabilities were more than 1 billion dollars more than its assets (1,053,700,000, to be exact). In short, Reliance does not have the assets to meet all of the liabilities of its policyholders at 100%. The Insurance Commissioner's order includes a 90-day stay of all action against Reliance and Reliance's insureds, and requests comity from states in enforcing the stay so that each state's insurance guaranty fund may arrange to defend Reliance's insureds. The payment of Workers' Compensation Claims and PIP (Personal Injury Protection) Claims are subject to special provisions, and anyone with those claims should review the Petition and Order. Order of Liquidation (Executed October 3, 2001) Petition for Liquidation (Contains Order of Liquidation and Explanation of Reasons for Liquidation) |
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