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Information about the Liquidation of Reliance Insurance Company

The Commonwealth Court of Pennsylvania has declared Reliance Insurance Company (Reliance) insolvent and has ordered the company into liquidation effective October 3, 2001. This booklet will help to answer frequently asked questions about making claims and the liquidation procedure.

The Office Insurance

of Liquidations, Rehabilitations and Special Funds of the Pennsylvania

Department

has

been

assigned

the

responsibility

of

liquidating

Reliance, and all questions concerning the liquidation of directed to the Statutory Liquidator for Reliance, P. O. Box PA 19101-3527, telephone (215) 864-4000.

Reliance should be 13527, Philadelphia,

1.

What happens when a company becomes insolvent and is liquidated?

Liquidation is similar to bankruptcy.

When a company is liquidated, the

Insurance Department’s Office gathers the company’s assets

of Liquidations, Rehabilitations and Special Funds and determines what liabilities, such as bills and

claim payments, it has.

The Statutory Liquidator then develops a plan to

distribute the company’s assets according to law and submits the plan to the Court for approval. The liquidation process is very complex and is expected to take many years.

2.

You say Reliance was ordered liquidated. worthless?

Does this mean my policy is

No

. Although Reliance has been placed into liquidation, the guaranty association

in the state where you reside or where the property is situated may be obligated

to provide coverage under insurance policies issued by Reliance subject

certain

limitations.

Any

claim

or

portion

thereof

which

is

not

covered

by

to a

guaranty association becomes a claim against amount deemed to be an allowed claim will be

the Reliance

estate, and

paid to the

extent funds

the are

available, on an equal basis claims may be paid in full, in These claims will not be paid

with all other claims in the part or not at all, depending for many years.

same category.

These

on the available

assets.

3.

Will my policy be canceled because of the liquidation?

A paid Reliance policy will terminate at its normal expiration, upon replacement or November 2, 2001 (30 days from the date of liquidation), whichever was sooner.

4.

What is a guaranty association?

A guaranty association is an association of all insurers licensed to write property and casualty or life and health insurance in a state. Subject to statutory eligibility

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