Runoff

  • The insurance usage of “runoff” can be traced back at least as far as the 17th century marine insurance market at Lloyd’s coffee shop.

2021 - LR - Uncertainty > Risk: Lessons for Legal Thought from the Insurance Runoff Market, Tom Baker - 51p

  • While a company may be able to minimize and finalize its payments through a commutation with a policyholder, though, it often faces difficulty collecting from its reinsurers, she noted.  (Cheryl Sheridan, director of marketing for specialist runoff manager Global Resource Managers Ltd., a London-based unit of CNA.)
  • "Once a company is in runoff, it finds it very hard to collect its reinsurance claims, as reinsurers focus their cash flow on live clients," said Mr. McGuigan, pointing out that this creates a cash flow crunch and a claims payment slowdown throughout the chain to the original policyholders.

2005-4, NAIC Proc.

  • 3.2. Partial run-off undertakings are undertakings where only part of the business is discontinued while the rest of its business is in going concern.
    • (p4) - For the purpose of this Supervisory Statement, partial run-off refers to the cases where a material part of the undertaking’s business is stopped13 (i.e. it excludes the cases where a minority of nonmaterial products/line of business is discontinued).
    • 13 Covering also cases when premiums can still be paid with new liabilities of the insurer(no contractual guarantee on these future premiums - included or not included in the contract boundaries), such as contracts with flexible premiums or universal life.

2022 0221 - EIOPA - Supervisory Statement On Supervision Of Run-Off Undertakings - 19p