NEW BILL TO AUTHORIZE SOLVENT RUN-OFFS

OKLAHOMA LEGISLATURE CONSIDERING NEW BILL TO AUTHORIZE SOLVENT RUN-OFFS.

The Oklahoma legislature is considering a bill (S.B.606) to authorize solvent run-off.  The legislation is similar to the Rhode Island Voluntary Restructuring of Solvent Insurers Act (“RI Act”) and the approval process appears to be a hybrid of the RI Act’s Commutation Plan approval process and the Insurance Business Transfer approval process.   The OK bill authorizes companies to apply to the OK Insurance Commissioner for an order implementing a “Commutation Plan”.  There is a voting process and if the plan is sufficiently approved by each class of creditor and the commissioner determines that the implementation of the commutation plan would not materially adversely affect the interests of objecting creditors, the Commissioner will enter an implementation order that provides for a novation of the transferred policies.  Click here to read the proposed bill in full.