The Vermont Superior Court for Washington County has placed Global Hawk Insurance Company Risk Retention Group (Global Hawk RRG) into liquidation as of June 8, 2020.
The liquidation is being handled by the Vermont Department of Financial Regulation, as Global Hawk RRG is domiciled in the state.
This comes after the court determined that Global Hawk RRG is insolvent and “further transaction of business would be hazardous, financially or otherwise, to its policyholders, its creditors or the public,” according to the June 8 liquidation order.
Global Hawk was originally formed as a risk retention group in 2003 in South Carolina. The company re-domesticated to Vermont on February 20, 2009, and was authorized to do business as a risk retention group writing automobile liability insurance coverage for motor trucking carriers.
As of December 31, 2019, Global Hawk RRG reported assets of $42.7 million, including $37.6 million of cash and invested assets, and liabilities of $34.9 million. At that time, Global Hawk was registered in 10 jurisdictions, not including Vermont, and had in-force coverage in seven states, according to a June 5, 2020, proposed order for liquidation issued by Michael S. Pieciak, commissioner for the Vermont Department of Financial Regulation.
As of April 30, 2020, the company was providing commercial auto insurance to 1,008 vehicles. Its case reserves, or defense and indemnity reserves on known claims, as of April 30 totaled $11.9 million on 224 open claims. This figure, more than 10 times the company’s liquid assets the prior month, does not fully state Global Hawk RRG’s actual policy obligations because it excludes consideration of losses that have been incurred but not yet reported or its obligations for unearned premium upon termination of the in-force business, according to the proposed order of liquidation.
“The company is a risk retention group and so deeply insolvent that the vehicles are effectively uninsured,” the proposed order stated. “Further, because Global Hawk RRG appears to have focused on insuring small trucking operations…it is reasonable to assume that the members may lack the financial scale to absorb and pay uninsured losses.”
Pieciak has sought to alert producers and members so they can secure alternative commercial auto insurance coverage, the proposed order stated.
For creditors that believe they have a claim or may have a claim in the future against Global Hawk or one of its insureds, a proof of claim form must be filed in order to preserve the claim. If a proof of claim is not filed before the filing deadline of December 8, 2021, creditors may not receive any distribution from the Global Hawk liquidation proceeding, according to the Vermont Department of Financial Regulation website.
Executives at Global Hawk RRG did not respond to a request for comment from Insurance Journal.
Insurance Journal West Editor Don Jergler contributed reporting.
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