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Company background
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The Insurance Corporation of Singapore (U.K.) Limited commenced
underwriting in 1980 as a member of various pools, notably the three English and
American ("E&A") pools, in which it participated until 1991. Joint Provisional
Liquidators were appointed in 1993 when the company's solvency became
questionable, leaving fellow E & A pool members as the principal creditors.
After investigating a number of alternatives, the Joint Provisional Liquidators
concluded that a Scheme of Arrangement was the best means of providing Creditors
with a return within the shortest possible time period. The Scheme became
effective on 25 January 2002.
The Scheme is a reserving scheme of arrangement. The Creditors can be broadly categorised as:
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Oberon Pool Creditors - Creditors with claims arising as a result of the Company having participated as underwriter in the Oberon Pool. Oberon Pool
Creditors will be paid IN FULL by St Paul Re in the normal course.
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E&A Pool Participants - The eight Participants in the E&A Pools whose claims constitute the majority by value of the Company's liabilities. E&A Pool
Participants have been, and will continue to be, paid a share, calculated in
accordance with a formula set out in the Scheme, of the Company's General
Assets, after payment of, among other things, Scheme Expenses.
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E&A Pool Creditors - Cedants to the E&A Pools and the remaining participants in the E&A Pools.
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General Creditors - Creditors who do not fall within any of the above three categories.
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A proportion of the Company's assets is set aside to form the Creditors'
Fund, from which the claims of E&A Pool Creditors and General Creditors should
be paid IN FULL in the normal course by the E&A Pool Manager. The fund is capitalised on a
prudent basis, allowing a margin for potential deterioration. In establishing
the value of the assets to be set aside to form the Creditors' Fund, no account
is taken of actual or potential set-off.
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An initial "catch-up" payment was distributed to External E&A Pool Creditors
on 4 July 2002. This payment was made to bring ICS (UK) into line with the
remainder of the E&A Pool. The payments were for 100% of unsettled 'paid'
balances as at 30 September 2001.
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An actuarial review of the Company's liabilities arising out of its
participation in the E&A Pools has been and will be carried out annually. If it
appears that the solvency margin of the Creditors' Fund has fallen below a
certain level, full set-off based on the rules which would apply in liquidation
will be applied before E&A Pool Creditors and General Creditors are paid. In the
unlikely event that deterioration in reserves is such that even on a net basis
the Creditors' Fund is insufficient to pay those creditors in full then they
will receive a dividend in respect of their claims.
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If you have a query as an E&A Pool Creditor please contact PRO Insurance Solutions' ICS (UK)
helpdesk on telephone +44 (0) 1452 330 514 or email them here
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