Royal & Sun Alliance US runoff Arrowood placed into liquidation
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Arrowood Indemnity Co., the runoff U.S. insurance operation of Royal & Sun Alliance Insurance Group PLC, was placed into liquidation on Thursday by the Chancery Court of Delaware.
Arrowood estimated that for the third quarter, its projected future claims and expenses exceeded its assets by about $17 million, according to the complaint seeking liquidation that was filed with the Chancery Court by Delaware Insurance Commissioner Trinidad Navarro, who has been named the company’s receiver.
Dennis Cahill, president and CEO of Charlotte, North Carolina-based Arrowood Capital, which acquired Arrowood Indemnity in 2007, said in a statement that since going into runoff in 2003, the insurer’s staff has settled more than 113,000 claims, recovered significant reinsurance assets and supported the company’s goal of a solvent run-off.
“Unfortunately, the enactment of child victim act statutes and the continued emergence and re-emergence of claims related to legacy insurance policies issued decades ago continue to adversely impact the company’s financial condition,” the statement said. Arrowood Indemnity consented to the liquidation.
In December 2020, Arrowwood sued the Roman Catholic Diocese in Brooklyn, New York, seeking a declaration that the diocese and its affiliated parishes and schools have no insurance coverage for the nearly 500 suits filed against them alleging sexual abuse of minors under the New York Child Victims Act, according to the complaint in Arrowwood Indemnity Co. et al. v. The Roman Catholic Diocese of Brooklyn, New York, et al.
The diocese and other defendants subsequently filed counterclaims in the case.
In March, the court agreed to stay the insurer’s claims until the underlying lawsuits implicating their insurance policies were resolved.
On Thursday, the Diocese’s attorney filed a letter with the court pointing out that under Delaware’s liquidation order, any proceedings against Arrowood are stayed.
