Solvent Schemes Come To America

Law360, New York (June 8, 2011, 1:01 PM EDT) -- When insurance and reinsurance companies cease to write a category of business, they remain liable under policies already issued. The process of paying out claims on those policies, collecting applicable reinsurance coverage and renewing polices where required is called a “run-off.”

When the discontinued book consists of occurrence coverage for claims with long-tail liabilities, such as asbestos, toxic tort or pollution claims, the run-off can last many years, and over the course of those years, the run-off can consume significant expense and tie up a large...
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