Executive Life Insurance Company of New York (ELNY) was placed into rehabilitation in 1991 after affiliated companies became insolvent and concerns about its future solvency arose. The rehabilitation plan adopted in 1992 involved the transfer of much of ELNY's business to another carrier; however, ELNY in rehabilitation retained substantial assets and continued payment on certain annuities, with the bulk of the payout going to structured settlement annuitants that had received long-term and/or lifetime annuities as settlements in personal injury lawsuits.

Recently, a New York state court gave the New York Liquidation Bureau ("NYLB") permission to notify more than 300,000 creditors of Union Indemnity Insurance Company (“Union Indemnity”) that it plans to make the first distribution from the insolvent property casualty insurer's estate. See In Re Union Indemnity Ins. Co., No. 41292/85 (N.Y. Sup. Ct., Oct. 10, 2007).

The lengthening of the restoration period for dormant companies may make a solvent liquidation an attractive option for some companies. James Stonebridge examines the impact of changes introduced under the Companies Act 2006.

The judgment of the Commercial Court in WASA and AGF v Lexington shows that a “follow settlements” clause in a reinsurance contract will not obviate the need for the reinsured to demonstrate that an inwards settlement falls within the terms and conditions of its outwards reinsurance. Partner Michael Mendelowitz reviews the judgment.

Saddleback Valley Community Church v. El Toro Materials Company, Inc. 2007 U.S. App. LEXIS 22991 (October 1, 2007) Client Alert

In a decision that should provide comfort to landlords confronting insolvent tenants, the Ninth Circuit recently ruled that the Bankruptcy Code’s limitation on the amount of damages a landlord is entitled to recover upon termination of a lease does not limit the landlord’s right to recover damages which are not based upon the loss of future rental income.

On the 1 October 2007 new Practice Directions to the Civil Procedure came into force which will affect applications to court under the Companies Acts 1985 and 2006. In particular the rules in relation to schemes of arrangement under section 425 Companies Act 1985 are being amended to incorporate provisions in the Companies Act 2006 coming into force on 1 October 2007.

The 4th session of the committee of governmental experts on Intermediated Securities met in May 2007 to continue negotiation of the draft Convention. The Convention deals primarily with the rights of account holders in relation to intermediated securities - securities held through financial intermediaries.

On July 12, 2007, the Massachusetts Supreme Judicial Court held that, where a vehicle causing an accident is owned by a governmental entity and is insured by an insolvent insurer, the Massachusetts Insurers Insolvency Fund is not obligated to compensate the injured individual unless and until the injured individual's own uninsured motor vehicle coverage has been exhausted. Massachusetts Insurers Insolvency Fund v. Premier Ins. Co., 07-SJC-09793 (July 12, 2007).

The Committee of European Insurance and Occupational Pensions Supervisors (CEIOPS) has published an Issues Paper on 'Risk Management and Other Corporate Issues'. The paper is not a formal consultation. Instead, it is part of CEIOPS' preparation for future work under the Solvency II project.

In North American Catholic Educational Programming Foundation, Inc. v. Gheewalla, 2007 WL 1453705 (Del. May 18, 2007), the Delaware Supreme Court, in a case of first impression, provided some clarity on the controversial issue of whether and to what extent creditors have the ability to assert fiduciary duty claims against directors.