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ARTICLE · 03 OCTOBER 2006

Solvent Run-Off Scheme A First For Australia

Clayton Utz
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Although widely used in the UK, solvent schemes for reinsurance run-off are only now being adopted in Australia.

AustraliaCorporate/Commercial Law
Peter Mann
Peter Mann
Nicholas Mavrakis
Nicholas Mavrakis
Michael Parshall
Michael Parshall
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Key Point

  • Although widely used in the UK, solvent schemes for reinsurance run-off are only now being adopted in Australia.

NRG's solvent run-off scheme, approved by the Federal Court last month, is an Australian first.

Under the scheme, which applies to reinsurance written by NRG's Australian wing, cedants will be able to achieve immediate settlement of both existing and future claims. Paying out the policies will allow NRG to close its Australian reinsurance run-off book.

This is the first time that Australian reinsurance liabilities have been subject to a solvent run-off scheme. This development clears the way for schemes by other solvent reinsurers whose Australian business is in run-off.

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