Current Issues in Run-off and Commutations

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Course overview

The run-off industry is projecting huge growth in the coming years. Run-off liabilities are currently estimated at several hundred billion US$ and this is set to rise even more. With this type of growth and following the implementation of the EU Reinsurance Directive and other important judgments which will effect schemes of arrangement and the latest trends in exit strategies, this is an ideal time to get upto- date with all of these issues.

This timely update will focus on these current issues and others in run off and commutations. Throughout the programme the distinguished and expert panel of speakers will offer their insights and experience, plus many practical tips and techniques to ensure that by the end of this concise day you are completely upto- date from a legal, commercial and practical perspective.perspective.

Who should attend?

• From insurance, reinsurance and run-off companies:
  • Directors
  • Claims executives
  • In-house counsel
  • Run-off managers
  • Actuaries

• And other industry professionals including:
  • Lawyers in private practice
  • Brokers
  • Consultants

Why should you attend this seminar?

By attending this seminar, you will:

• UNDERSTAND how to manage a run-off company including dealing with changes to the Board
• HEAR about tips and techniques for drafting commutation agreements and commutation wordings
• GAIN an understanding of current exit strategies around the world
• GET-TO-GRIPS with the key issues in claims handling for businesses in run-off
• EXAMINE the complexities of portfolio transfer around the world

Programme

Introduction: Overview of current legal issues facing the run-off market

• Growth in run-off and distinguishing different legal ‘run-off vehicles’
• Recent British cases relating to run-offs, including Scottish Lion
• Implication of recent VAT rulings, including the ECJ’s ruling in Swiss Re Germany Holding GmbH on the imposition of VAT on portfolio transfers

Current actuarial issues

• Sales and Part VII transfers
• Solvent schemes of arrangement
• Voting classes
• Recent issues in commutations
• Adjudication
• Closing off the scheme

Managing a run-off company

• Changes to the board
• Changes in focus
• Getting run-off specialists onto boards

Schemes of arrangement

• Effect of recent judgments on solvent schemes of arrangement
  • BAIC
  • WFUM
  • Scottish Lion
• Successful schemes in light of these judgments
• The FSA’s approach to solvent schemes
• Practical implications of the recent cases for scheme promoters and policy holders
• Solvent but distressed schemes of arrangement
  • Equitable Life
• What is the next challenge?

Legal aspects of commutations

• Audits and inspections leading to commutations
• Drafting commutation agreements
• Recoverability of commuted amounts/ IBNR from reinsurers
• Wording of commutation clauses in reinsurance treaties

Strategies for effective exits in the USA and Continental Europe

• An examination of some of the latest issues in exit strategies
• UK solvent schemes
• US run-off options – more about insolvency
• Scheme v Bankruptcy
• What to watch
• Commutations/Claims valuations

Insolvent run-off

• Minimising payment while maximising collections
• Problems where one or both parties are insolvent
• Special considerations when commuting with an insolvent insurer/re-insurer

Portfolio transfers around the world

• What are they?
• Why undertake a portfolio transfer?
• Portfolio transfers in different regions
• What is the impact of borders
• Recent developments

The expert faculty

Expert Presenters

Peter Fidler is Special Counsel with Edwards Angell Palmer & Dodge UK LLP. He has focused on insolvency and banking for over 30 years and has been recognised in the legal directories as one of the leading practitioners in insurance insolvency since the early 1990s; he has been noted for innovative advice on schemes, described as first class for complex international schemes and hailed as the godfather of insurance insolvency. He is also highly regarded for asset tracing cases in insolvencies.

Helen A Franzese is Counsel of Riker Danzig London LLP and practices exclusively in insurance law, advising and representing insurance companies in complex coverage litigation and alternative dispute resolution proceedings. She has represented London Market companies, syndicates and US based insurers in asbestos, pollution and health hazard related coverage matters.

Tim Goggin is a partner at Hogan Lovells where he specialises in corporate and regulatory advice to insurance industry clients including mergers and acquisitions, reorganisations, joint ventures and authorisations. Tim joined Hogan Lovells in 1994 and became a partner in 2003. Since 2004 he has been recommended for non-life insurance corporate and regulatory work by the UK’s legal directories. He is described in Chambers UK 2010 as having “an excellent reputation as a transactional and regulatory specialist”. He is a regular speaker on insurance business transfers and Solvency II.

Alison Green is joint leader of the Insurance and Reinsurance Group of 2 Temple Gardens, London. She specialises in commercial law, in particular insurance and reinsurance law, professional negligence and private international law. She has extensive experience of insurance and reinsurance litigation on coverage and avoidance disputes involving a wide variety of covers. Alison is Vice President of the British Insurance Law Association, having previously been its Chairman, and is Vice Chairman of the Law Reform Committee of the Bar Council. Alison is recommended as a leading junior specialising in Insurance in Chambers and Partners’ Directory. She is described in the 2010 Directory as “an eminent authority in the insurance community”, whose recent case highlights have included handling complex issues of French insurance law relating to a significant product contamination case.

Chris Hill is a senior associate within the insurance and reinsurance practice. He advises on both contentious and noncontentious matters. He has advised insurers undertaking Part VII transfers and schemes of arrangement on all matters relating to the Court process. He recently conducted a comparative study for the International Bar Association on the ways in which insurance and reinsurance portfolios can be transferred around the world. Contributions were obtained from 27 countries. Chris also advises on transactions involving insurance linked securities as well as agreements distributing insurance products.

Anthony Lennox is a partner in the London office of Berwin Leighton Paisner. Anthony is Trainee Principal and Head of the firm’s Reinsurance and Insurance Group. He has extensive experience in reinsurance and insurance litigation, arbitration and dispute resolution for a wide variety of UK and international insurers, reinsurers and intermediaries (including brokers). On reinsurance, he has a wide range of experience, including PA, major treaty disputes, reinsurance recoveries and run off problems. On insurance, he has particular experience of directors and officers liability, product liability, legal expenses insurance, commercial lines, jeweller’s block, property damage and personal accident claims.

Graham Oswald is an Associate Director in the PwC Actuarial & Insurance Management Solutions team, specialising in general insurance. He is a qualified actuary with ten years of consulting experience, providing advice to insurers and reinsurers on a wide range of actuarial services including reserving, business planning and commutations issues. Graham has extensive experience of the general insurance run-off market and specialises in the estimation of latent claim liabilities for both reserving and commutation purposes. He has worked with a number of claims and legal professionals to negotiate settlement values for commutations (particularly in relation to the insurance and reinsurance of US APH business) both inside and outside of Schemes of Arrangement. He has also assisted several clients with the implementation of Schemes of Arrangement.

Vivien Tyrell is a partner at Reynolds Porter Chamberlain in London. Vivien is an authorised insolvency practitioner and has advised on insurance insolvency since 1987. Vivien has prepared several Schemes of Arrangement of international insurance and reinsurance companies and advises on the insolvency aspects of contentious and potentially contentious matters arising in the insurance industry. Vivien is recognised by the Legal 500, Chambers Directory of the Legal Profession and Euromoney Expert Guides – Insolvency and Restructuring Lawyers as a leader in her field.

David Vaughan is CEO of Tawa where he is responsible for developing its business via acquisitions, extracting value from CX RE and its other run-offs and directing and overseeing Tawa’s service provision to the Insurance Market. David was a partner in the Insurance Business Restructuring Services division of PwC prior to joining Tawa in May 2001 and has specialised in the insurance and reinsurance industry since 1987 with extensive experience in advising underwriters, brokers, underwriting pools and life companies. David focuses on advising run-offs on exit routes, run-off strategy, financial restructuring, effectiveness reviews, support on reinsurance disputes and insolvency advice.

Nick Watford is a director in the PwC actuarial insurance practice. Nick has 14 years experience of providing a range of actuarial solutions to P&C insurers and reinsurers. For the last 9 years he has specialised in the development of actuarial solutions to assist both solvent and insolvent schemes of arrangement. He has worked on the closure phase of most of the large insolvent schemes in the market over recent years, including Andrew Weir, North Atlantic and KWELM. He has provided advice to several solvent schemes with significant asbestos, pollution and other latent claim liabilities. Nick has extensive experience in working with claims and legal professionals to negotiate settlement values for commutations both inside and outside of schemes of arrangement.

Past delegates’ comments

Some of the comments received by participants on this course:

“I found it really interesting and found Falconbury to be more efficient than some other course providers. I really appreciated it”

Sara Sullivan, Fortis (UK) Ltd

“Philip Grant was excellent, informative, thought provoking and entertaining”

Stephen Last, GLOBAL Re

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Client portfolio

Our client portfolio for this course includes the following companies:

AIG Europe (UK) Ltd	Euler Ermes Credit Insurance Belgium	Pro Insurance Solutions Ltd
AXA Germany	Fortis Insurance Ltd	Pro-Ltd
AXA LM	Freshfields Bruckhaus Deringer LLP	Protection Reinsurance Intermediaries AG
AXA LM Switzerland	GKA Allgemeine	QBE European Operations
AXA Liabilities Managers Switzerlands	GLOBAL Re	QBE Insurance
AXA Versicherung AG	Grant Thornton	RAS- Riunione Adriatica di Sicurta
Allianz Cornhill Insurance plc	Great Lakes Reinsurance (UK) PLC	Scor Switzerland
Alm Brand	HSBC Insurance (Ireland) Ltd	Shell Finance Switzerland
Alwen Hough Johnson Ltd	Hannover Re	Sirius International Belgium
Assicurazioni Generali-UK Branch	Hannover Rückversicherung AG	Sirius International Insurance Corp
Atradius Reinsurance Ltd	Heritage Managing Agency	Solicitors Indemnity Fund
Axiom Consulting Ltd	Holman Fenwick & Willan	Spectrum Syndicate Management Ltd
Beazley	Houthoff Buruma	St Paul Travellers
Castlewood	Ince & Co	Swiss Re
Castlewood (EU) Ltd	Inter Hannover	Tawa Management Ltd
Chiltington International SA	JMD Specialist Insurance Services Ltd	The Lawrence Re Ireland Ltd
Clyde & Co LLP	LONDON UNDERWRITING CENTRE LTD	WARTA Insurance & Reinsurance Company SA
Converium AG	Lloyd’s of London	WHITTINGTON MANAGEMENT SERVICES LTD
Deloitte & Touche LLP	Minster Insurance	Walton Insurance Ltd
Deloitte LLP	Munich Re	Watson Wyatt Worldwide LLC
Denis M Claytons & Co Ltd	PRO Insurance Solutions	Winterthur Insurance
Dominion Insurance Company Ltd	Partner Reinsurance Europe Limited, Succursale Francaise	Wuerttembergische Versicherung AG (UK Branch)
Downlands Liability Management Ltd	Pinsent Masons LLP	Wurttembergische UK Ltd
Dunav Re	Pixys Servizi srl	ZURICH GLOBAL CORP UK LTD
EMB Consultancy	Price Water House Coopers LLP
Enstar EU Ltd	PriceWaterHouseCoopers

Continuing professional development

Solicitors Regulation Authority

This course is accredited for 6.00 CPD hours (CPD reference CSC/FALI).

General Council of the Bar

This course is accredited for 6.00 CPD hours.

Chartered Insurance Institute

This event has been accredited by the CII and can be included as part of your CII CPD requirement should you consider it relevant to your professional development needs.