As the December 31st deadline fast approaches to file a proof of claim in the Bedivere Insurance Company liquidation, some policyholders might be scrambling to understand how to file a proof of claim and which policies are impacted (and which are not). Bedivere is the ultimate successor to the U.S.-based liabilities of the Commercial Union and General Accident companies; its corporate history spans over 150 years and almost as many insurance company names. However, there are few quirks worth understanding while preparing submissions:
American Employers Update
Policyholders with American Employers Insurance Company (“AEIC”) coverage have been interacting with Bedivere and its predecessors (and its claims handlers) for decades. However, AEIC was actually sold in 2007 and has since been renamed SPARTA Insurance Company. As part of the sale, Bedivere was to assume responsibility for all prior AEIC claims and policies, so policyholders likely didn’t notice any difference.
However, it appears that Bedivere is actually the reinsurer of AEIC policies. Therefore, responsibility has reverted to SPARTA now that Bedivere is in liquidation. It should be noted that SPARTA has filed a lawsuit alleging that another company, Pennsylvania General Insurance Company, is actually responsible for the AEIC policies. While the situation remains murky, AEIC policyholders will likely be able to work with one of the two companies on their claims. We understand that A.G. Risk Management (formerly Armour Risk Management) has been retained to handle claims and recommend that AEIC policyholders contact them as soon as possible.
Employers Surplus Lines Update
Policies issued by Employers Surplus Lines Insurance Company (“ESLIC”) are caught up in a different, potentially more difficult web. Like AEIC, ESLIC was at one point sold off and Bedivere appears to have reinsured the liabilities. Unlike AEIC, the responsible entity was already liquidated in 2001. We have been advised that the Bedivere estate will accept proofs of claim filed for ESLIC policies, but that these claims may be considered under a lower distribution priority.
Preparing the Proof of Claim Forms
So, what’s a responsible policyholder to do? First, review all available coverage information and take note of any potential Bedivere coverage (KCIC can assist with this if you don’t know the names of the companies involved). Next, consider the types of liabilities you may face. We typically recommend filing proofs of claim to preserve coverage for any and all possible future claims. For example, policyholders who have product liabilities that impact Bedivere policy aggregate limits should also consider the possibility that they might one day be asked to clean up any manufacturing facilities or dumps, liability for which may be subject to separate limits.
The form itself asks for as much information about the claim and the coverage block as can be provided. Several of my clients are preparing summary memos and attaching a policy listing to provide some context to the POC forms. Policyholders should endeavor to submit as much information as they are able to at this late hour – the most important thing at this juncture is to submit the POCs on time. Even those who believe their claims should be handled by state guaranty funds likely will still want to file with Bedivere to cover all bases.
Wrapping Up Your Proof of Claim Filings
Bedivere is proving to be every bit as complicated the estate we anticipated, and we expect to be dealing with these policies and claims for years to come. KCIC will continue to help policyholders get their POCs submitted on time and will report on future Bedivere developments regularly.
If you or your client need assistance with their Bedivere POC, please reach out as soon as possible.
Never miss a post. Get Risky Business tips and insights delivered right to your inbox.
Nick Sochurek has extensive experience in leading complex insurance policy reviews and analysis for a variety of corporate policyholders using relational database technology.Learn More About Nicholas