The Oklahoma Insurance Commissioner has approved the insurance business transfer (IBT) of a portfolio of Sentry Insurance reinsurance policies to National Legacy Insurance Company (NLIC), a Randall & Quilter Investment Holdings (R&Q) wholly-owned subsidiary.
The policies relate to Sentry’s involvement as a member of the excess and casualty reinsurance association pool (ECRA).
The IBT application reviewed by commissioner Glen Mulready included extensive financial information, a plan for how the transaction will be communicated to stakeholders and a report from an independent expert, concluding that the proposed transaction will not have a materially adverse effect on stakeholders.
The transfer of Sentry’s ECRA pool insurance liabilities to NLIC will not change policy terms, rights and obligations or the way the policy is administered.
By having the commissioner’s approval, it will now allow the parties to petition the Oklahoma District Court to obtain final approval.
In October, the District Court of Oklahoma County approved the Providence Washington Insurance Company (PWIC) to complete its IBT plan, making it the first IBT in the US.
The Oklahoma IBT law, which became effective in November 2018, closely mirrors Part VII Transfers of the Financial Services and Markets Act of 2000 in the UK.
Commenting on the approval, Mike Walker, head of legacy at R&Q, said: “We are pleased to have completed this important step in the Oklahoma IBT process and we will now focus our efforts on engaging with stakeholders and obtaining a successful court outcome.”
“We believe this innovative solution will become increasingly common as a tool to transfer liabilities effectively between insurance companies. It will prove to be of particular use to those entities looking to exit lines of business or dispose of legacy portfolios in the US.”
“The oversight of the Commissioner and the court, coupled with the rigour of the independent review and communication processes required under the legislation, provides a robust framework for stakeholder protection,” Walker concluded.
