Pennsylvania Insurance Commissioner M. Diane Koken announced that the Commonwealth Court of Pennsylvania had granted the Insurance Department’s request to place financially troubled Reliance Insurance Company into rehabilitation, effective immediately.
A Pennsylvania-domiciled company, Reliance Insurance Company is licensed to write coverage in all 50 states, although it put in place a process to stop writing virtually all new or renewal business in June 2000. The states with the largest number of policyholders include California, New York, Florida, Pennsylvania, Illinois and Texas. Reliance Insurance Company’s insurance business consists of workers’ compensation, commercial auto, commercial liability and personal auto coverage. The company’s direct written premiums for 1999 were $1.5 billion.
The Order of Rehabilitation places Reliance Insurance Company under the statutory control of the Pennsylvania Insurance Department. The order grants to the Insurance Commissioner the direct authority to preserve the assets of the company and to oversee the its financial situation and current operations while continuing to pay policyholder claims.
The Insurance Department will perform an independent and thorough evaluation of the company’s finances. Based upon the review, the Insurance Department then will determine the viability of a plan of rehabilitation. Any plan will give priority of payment to policyholder claims.
Included in the Order of Rehabilitation are the following companies that were previously merged into or otherwise acquired by Reliance Insurance Company: Reliance Insurance Company of Illinois; Reliance Direct Insurance Company; Reliance Surety Company; United Pacific Insurance Company; Reliance National Insurance Company; Reliance Universal Insurance Company Inc.; Reliance National Indemnity Company; United Pacific Insurance Company of New York; and Reliance Lloyds.
Commissioner Koken’s written statement regarding Reliance Insurance Company is available on the Insurance Department’s website at www.insurance.state.pa.us.
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