Editor's note: Insurer insolvencies are astronomically expensive. With the Reliance Insurance Cos. insolvency in its fifth year and the Mission Insurance Cos. insolvency taking 21 years to close, this is an issue that is compelling enough to be on the radar screen of any commercial insurance buyer.
There is a need for this series to expose and increase awareness of the flaws in the nation's insurance system.
This four-part series is not intended to be an indictment of those that work within this system, but simply a recognition that readers could benefit from a system laced with more transparency, accountability and efficiency, whether that system is state-based or federal.
This series is also intended to alert readers and commercial buyers who find their insurance company in receivership, and to provide a glimpse of what to expect.
Insurance Insolvencies, Part 1
This first part of the series took a look at the U.S. system for handling property/casualty insurance failures. It is a system that is failing insurance buyers, particularly commercial insureds, because of systemic problems that lead to excessive costs and extraordinary delays.
Insurance Insolvencies, Part 2
The second article in this series took a look at the treatment of claimants, creditors and other stakeholders in insolvencies and how more complex receiverships under the present system do not serve these constituencies very well.
Insurance Insolvencies, Part 3
The third article featured a case study on the failure of a major U.S. insurer, Mission Insurance Cos. To provide insight, the case was contrasted with the collapse of the HIH Insurance Group, Australia's second-largest insurer.
APRIL 1, 2007
Insurance Insolvencies, Part 4
The fourth and final article in the series identifies and discusses recommendations to make the system more efficient, less costly and more responsive to creditors and other stakeholders in the insolvency process.
About the authors and Navigant Consulting: Navigant Consulting Inc. is a specialized independent consulting firm providing litigation, financial, health-care, energy and operational consulting services to government agencies and large companies facing the challenges of uncertainty, risk, distress and significant change. The company focuses on industries undergoing substantial regulatory or structural change and on the issues driving these transformations.
*The views expressed in these articles are those of the authors and not those of Navigant Consulting, its clients or affiliates.
April 1, 2007
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