Introduction
In this day and age where loans, mortgages, and other forms of financial assistance are frequently sought by persons who have been hard-hit by the Covid-19 pandemic, one may wonder as to what happens when one passes away and has yet to settle their liabilities. A more curious question which infrequently arises in the minds of most people is, what are the consequences if these liabilities exceed their assets when they pass away?
The Covid-19 outbreak has had a significant impact on Malaysian businesses in multifarious facets. The imposition of the Movement Control Order on 16 March 2020, restricted domestic and international travel, and prohibited the operation of non-essential businesses in order to curb the spread of the outbreak.
It is well known that directors have a duty to act in good faith and in a company's best interests. This duty takes centre stage, especially in times when a company's survival is threatened.
On 25 March 2010, HM Treasury published a consultation paper which proposes improvements to the protection and payment of benefits for policyholders of insurers in financial difficulty. In particular, the proposals address certain gaps in the regime for insurers in administration in contrast to the regime applied in liquidation.
The insolvency of UK insurance companies is, fortunately, a fairly rare event. Even in the current difficult times - and despite speculation about the solvency of some insurers - we have yet to see a UK insurance company actually go into liquidation.