Gibraltar-based insurer Elite Insurance Co. Ltd. received a court order Jan. 31 to design and roll out a scheme of arrangement after failing to meet its regulatory capital requirement.
The scheme of arrangement aims to provide a framework for managing Elite Insurance's business to maintain its solvency. The scheme will also allow the insurer to pay valid claims in the ordinary course of business.
Under the scheme, Elite Insurance will have a mechanism for buying policies back from certain groups of policyholders, provided that such action will not be prejudicial to the interests of policyholders. The scheme will also provide a mechanism to protect policyholders should the insurer's finances deteriorate in the future.
The court order was delivered with the support of the Gibraltar Financial Services Commission and the Supreme Court of Gilbraltar, and the scheme will be subject to the approval of these two entities.
Elite Insurance, which is now in runoff and is still solvent, was acquired by a group of investors led by Armour Group Ltd. in January 2018. Its operational management was taken over by an affiliate of the acquirer, Armour Risk Management Ltd. The insurer continues to process and meet all claims.