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Article: U.S.-based policyholders win round to halt runoff; Interim decision in Scottish Lion case seen as "significant'.(Scottish Lion Insurance)
- Article from:
- Business Insurance
- Article date:
- September 21, 2009
- Author:
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Byline: COLLEEN McCARTHY
A proposed runoff plan for Scottish Lion Insurance Co. Ltd. is in jeopardy after a Scottish court ruled in favor of a group of U.S.-based policyholders opposing the plan.
The move is likely to lend greater bargaining power to other U.S. policyholders involved in so-called solvent schemes of arrangement, in which solvent companies attempt to eliminate some liabilities through runoff, legal experts say.
The Sept. 10 opinion by Lord Glennie comes after the insurers' application to the Scottish Court of Sessions to sanction the plan, which would enable the solvent insurer to shed its liabilities and wind up the company.
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