Delaware's insurance comissioner has authorized the controversial sale of Royal & SunAlliance's US operation, but has outlined specific conditions to go with the approval.
Matthew Denn, the Delaware insurance commissioner, offered his support on the basis that Royal & SunAlliance (R&SA) and the new management company, to be known as Arrowpoint Capital, conformed to certain regulations designed to protect policyholders.
According to The Scotsman, the Silverstein Group, a real estate development firm, disputed the sale claiming that the new insurer, Arrowpoint, would not have enough funds to pay the $250 million that R&SA owes it following the tragic destruction of the World Trade Center in 2001.
Taking this into consideration, Mr Denn stated that Arrowpoint cannot pay dividends or distributions until all policyholder claims were resolved and a claims monitor was appointed to hear policyholders complaints and monitor the company’s reserves and claims denials, the newspaper added.
If the deal is successful, the transaction will contribute $287.5 million in capital, reported Business Insurance.