New York state will try to sell Midland Insurance, which is being liquidated with almost $1 billion of assets and $2.9 billion of liabilities, in the first-ever sale to private investors, the state insurance chief said Wednesday.
Midland was both an insurer and a reinsurer, and it owes $2.9 billion of unsettled claims to thousands of policyholders around the country, including corporations that paid claims to people suffering from HIV-tainted blood products, exposure to asbestos and faulty breast implants, Insurance Superintendent Eric Dinallo said in a statement.
New York's Liquidation Bureau, which handles more than 60 insolvent insurers, was named Midland's liquidator in 1986 -- 27 years after the company was founded.
"Never before has a court-appointed receiver engaged the private sector to help speed up the distribution of assets from a U.S. insurance company in liquidation," Dinallo said.
Private investors would have to pay only "a percentage of Midland's liabilities, in the form of a guaranteed distribution to policyholders with resolved claims," according to Mark Peters, a special deputy with the New York Liquidation Bureau.
Policyholders would be paid "a pro rata percentage of its (the insurer's) profits above a certain amount," Peters said, adding that the bids will mainly be judged on the guaranteed distribution and the profit sharing.
(Reporting by Joan Gralla; Editing by Jan Paschal)
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