The Copenhagen Reinsurance Company (CopRe) asked the UK High Court to make an Order sanctioning the intra-group transfer of the whole of its (re)insurance business to the Marlon Insurance Company (Marlon). Each of CopRe and Marlon wrote US excess and surplus lines insurance, and each of them maintained an excess and surplus lines trust fund in New York. The purpose of the transfer was to simplify the structure of the Enstar group. If the transfer was sanctioned, CopRe would be dissolved without winding up.
In the week that Leicester City overcame odds of 5000/1 to be crowned Premier League champions, the insurance market was (almost) as astounded at the news that the long-awaited Third Parties (Rights Against Insurers) Act 2010, which received Royal Assent on 25 March 2010, will be coming into force on 1 August 2016.
1 April 2016 will see the insolvency profession fall in line with other civil litigation as the exemption which enabled the recoverability of CFA success fees and After the Event (ATE) insurance premiums from the unsuccessful party to litigation comes to an end. This recoverability was abolished in other civil litigation in April 2013, principally as one of a number of changes intended to control and reduce the costs of civil litigation.
The Third Parties (Rights Against Insurers) Act 2010 is a step closer to coming in to force with the publication of draft Regulations whose aim is to correct omissions in the Act. Once in force the Act will improve the position of claimants who are bringing actions against insolvent defendants and looking to recover from those defendants' insurers.
Draft regulations were laid before Parliament on 25 February 2016 to amend the Third Parties (Rights Against Insurers) Act 2010
The Act, when it comes into force, will make it more straightforward for claimants to cut through directly to insurers when policyholders become insolvent. It has been six years since the Act was passed. These proposed amendments are another step on what has been a slow road towards bringing the Act into force.
As reported in Reed Smith’s March 2015 client alert, insolvency practitioners currently enjoy an exemption from the provisions of Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO).
http://www.bailii.org/ew/cases/EWHC/Ch/2015/3721.html
Two insurance intermediaries entered into administration. Although heavily insolvent, they had significant funds held in client accounts. Those funds represented insurance premiums collected from customers but not yet paid on to the insurers. The issue therefore arose as to whether the insurers, the customers or the unsecured creditors of the intermediaries were entitled to those funds.
On 17 December 2015, the Ministry of Justice made a final decision to end the Insolvency Litigation exemption from the 2012 Legal Aid, Sentencing and Punishment of Offenders Act (LAPSO) (see Written Statement here). Successful claimants will no longer be able to recover the success fee on a Conditional Fee Agreement (CFA) or After the Event insurance (ATE) premium from the opposing party for those CFAs entered into or ATE obtained from 1 April 20
The government has today announced that the insolvency exception to the Jackson reforms will come to an end in April next year. This means that CFA success fees and ATE insurance premiums will no longer be recoverable in proceedings brought by liquidators, administrators, trustees in bankruptcy, and companies in liquidation or administration.
In a written statement this morning from Lord Faulks QC, Minister of State for Civil Justice, the government has announced that, from April 2016, insolvency litigation will no longer be exempt from what have been abbreviated to “the LASPO reforms”.