| Background FAQs |
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The contents of this website are not a substitute for the contents of the Scheme document (which includes the Scheme and the Explanatory Statement). Scheme Creditors (as defined in the Scheme) should read and consider carefully the full text of the Scheme document.
1 What are the EAUA Pools?2 What is the position of English and American Insurance Company Limited ('EAIC')?
3 What is the position of The Insurance Corporation of Singapore (U.K.) Ltd ('ICS')?
4 What is being planned?
5 What is a Scheme of Arrangement?
6 How many different classes of creditors will there be in the EAUA Pools Scheme?
7 Why have I been sent a letter informing me of the Creditors’ Meetings?
8 What do I do if I have not received a letter?
9 Who will be affected by the proposed Pool Scheme?
10 What is the current timetable of events?
11 Has my broker been made aware of this development?
12 What should I do if I cannot trace any involvement with EAUA?
13 What should I do now?
14 What should I do if I believe I have Relevant UK Employer's Liability values?
1 What are the EAUA Pools?
The companies that were part of the EAUA Pools are listed on the EAUA Pools Companies page. These are referred to as the 'EAUA Pools Companies'.
The company with largest participation (approximately 75% of the estimated liabilities) in the EAUA Pools is English & American Insurance Company Limited ('EAIC') which is insolvent. Additionally, some of the other companies in the EAUA Pools have been in run-off for a number of years.
A brief description of the business written by the EAUA Pools is available on the EAUA Pools Scope page.
The EAUA Pools stopped accepting new insurance and reinsurance risks in 1992, since which time they have been in run-off.
PRO Insurance Solutions Limited ('PRO') is the pool run-off manager and has administered the EAUA Pools business since 1993.
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2 What is the position of English and American Insurance Company Limited (‘EAIC’)?
In 1993, EAIC became insolvent and in February 1995 it implemented a Scheme of Arrangement (‘the Original Scheme’) which was subsequently amended by an amending scheme of arrangement which became effective on 31 August 2000 (the "Existing EAIC Scheme"). Under the Original Scheme EAIC has continued to agree claims in the normal course and has made “Scheme payments” on a pro-rata basis to creditors with “Established Scheme Liabilities”. The current Scheme payment percentage is 35%. A copy of the latest report to EAIC's creditors issued by the Scheme Administrators may be viewed and downloaded from the Important Documents / Information page.
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3 What is the position of The Insurance Corporation of Singapore (U.K.) Ltd ('ICS')?
A copy of the ICS Scheme of Arrangement and Synopsis may be viewed and downloaded from the ICS further information page.
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4 What is being planned?
English & American Insurance Company Limited (‘EAIC’) has reached a point with its reinsurance collections and asset realisations where the Scheme Administrators believe that it is now time to propose a “closing” Scheme. This would involve setting up a mechanism to agree the values of claims to be submitted by policyholders. This would enable valuation statements to be prepared on a net basis for policyholders who are also reinsurers. Once these amounts are known, final dividends will then be paid and EAIC formally wound up.
If EAIC were to effect a closing Scheme in isolation, the effect would be to create a fragmented Pool administration, with the remaining Pool companies continuing in run-off, receiving claims notifications and collecting reinsurance balances as they arise. This may require policyholders to separate the presentation of their claims for collection between each of the individual Pool companies.
With this in mind, 15 EAUA Pool Companies have proposed a collective Scheme of Arrangement (‘Pool Scheme’) alongside EAIC. This would result in all of the liabilities of the 16 EAUA Pools Companies and their remaining reinsurance being valued in a consistent way. The mechanism for the valuation of policyholders claims will mirror that proposed by EAIC.
EAIC’s Scheme Administrators believe that a unified Pool Scheme will increase the ultimate distributions to creditors which can be paid earlier than would otherwise be the case if EAIC closed separately.
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5 What is a Scheme of Arrangement?
A Scheme of Arrangement is a compromise or arrangement between a company and some or all of its creditors or any class of them entered into pursuant to Part 26 of the English Companies Act 2006, which becomes legally binding on a company and its creditors or any class of them, if:
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6 How many different classes of creditors will there be in the EAUA Pools Scheme?
The court has ordered that:
2. for Scheme Creditors in relation to their IBNR Claims other than claims under (3) below; and
3. for Scheme Creditors in relation to their claims under those UK employer's liability covers listed in Schedule 1 to Appendix F of the Scheme; and
1. for Scheme Creditors in relation to their Scheme Claims other than IBNR Claims; and
2. for Scheme Creditors in relation to their IBNR Claims.
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7 Why have I been sent a letter informing me of the Creditors’ Meetings?
You have been sent a letter because PRO’s records in relation to the EAUA Pools show that you, or those that you represent, have in the past held a policy issued by some or all of the EAUA Pools Companies in respect of EAUA Pools business and PRO hold address details. If you are uncertain as to your position you should speak to your broker or other professional adviser or contact PRO via the Contacts page.
This Pool Scheme will result in a valuation and final payment to you in respect of any and all claims arising under your policy(ies) with the EAUA Pools.
We have written to Policyholders to:
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8 What do I do if I have not received a letter?
If you feel that you should have received a letter contact the EAUA Pools helpline, details are available on the Contacts page.
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9 Who will be affected by the Pool Scheme?
You will be affected by the Pool Scheme if you have a claim against one or more of the EAUA Pools Companies in respect of insurance business written by, or on behalf of, the EAUA Pools Companies which is included within the Pool Scheme.
It is intended that all of the business of English & American Insurance Company Limited ("EAIC") will be affected. It is envisaged that the Pool Scheme will apply to the majority of the remaining solvent EAUA Pools Companies’ liabilities to insureds, reinsureds and brokers arising out of the EAUA Pools, except for any of those solvent EAUA Pools Companies’ liabilities in respect of UK compulsory insurance.
Business to be included in the Pool Scheme is identified in the EAUA Pools Scope page on this Website.
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10 What is the current timetable of events?
The timetable for the key Scheme steps is as follows:
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15 October 2009 | |
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30 November 2009 | |
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30 April 2010 | |
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6 October 2010 | |
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12 October 2010 | |
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17:00 hours (UK Time)
on
11 April 2011 |
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11 Has my broker been made aware of this development?
Where PRO has addresses, all known brokers or intermediaries whom PRO believes may have acted for relevant scheme creditors in placing business have been informed of developments relating to the EAUA Pools.
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12 What should I do if I cannot trace any involvement with EAUA?
You can access the secure data site on the Website and review the data presented by PRO. If no data is present then you should contact your broker or intermediary who should be able to advise you of any involvement you may have with the EAUA Pools. You can also contact PRO using the EAUA Pools helpline, details are available on the Contacts page.
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13 What should I do now?
We recommend that you review your involvement with the EAUA Pools and associated business to be included in the Scheme. If you have any problems or questions please call the EAUA Helpline, details of which are shown on the Contacts page.
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14 What should I do if I believe I have Relevant UK Employer's Liability values?
Please note: If you believe you have Relevant UK Employer's Liability values please contact the EAUA Pools Helpline. More information regarding the Employer's Liability aspect of this Scheme can be found on this website and in Section 5.19 of the Explanatory Statement.
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Please also refer to the Scheme FAQs . These FAQs provide important information to Creditors in relation to the EAUA schemes.
In addition section 10 of the Explanatory Statement includes a number of questions and answers: this document is held on the Important Documents / Information page of the website.
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