Our Alert dated December 1, 2015 discussed the High Court of Justice of England and Wales’ approval of the proposed Amending Scheme of Arrangement for OIC Run-Off Limited (formerly the Orion Insurance Company limited) (“Orion”) and The London and Overseas Insurance Company Limited (“L&O”) (collectively, the “Insurers”).[1]

As an update, on January 11, 2016, the United States Bankruptcy Court for the Southern District of New York issued an order stating that the Amending Scheme “shall be given full force and effect in the United States” and that “all Scheme Creditors are permanently enjoined from taking any action in contravention of... the Amending Scheme.” The Amending Scheme became “effective” on January 14, 2016.  Further, the Scheme Administrators set a “Bar Date for claims submissions” of midnight (English time) on Monday, September 12, 2016 (“Bar Date”).[2]

The key terms of the Amending Scheme are discussed in our December 2015 Alert. As discussed therein, the Amending Scheme includes certain features that have not previously been used by insolvent London insurers. For example, certain policyholders will have the right to opt-out of the Amending Scheme and to continue to submit their claims under the run-off terms of the Original Scheme. If a certain percentage of policyholders opt-out, then the Amending Scheme would cease to have effect and all claims would continue to be handled under the Original Scheme. Further, the application of the Amending Scheme to certain claims under pre-1969 L&O policies remains uncertain.

In any event, at this point, policyholders should take steps to protect their rights under the Amending Scheme. Notably, policyholders should be aware that the Bar Date applies whether they decide to file claims or exercise any opt-out rights. In addition, policyholders that previously received an “Indicative Value Letter” (“IVL”) from the Scheme Administrators may be able to take steps now to convert the IVL into a settled claim, thereby triggering payments under the Amending Scheme.

[1] See G. Wright, G. Fehling & A. Cashman, “High Court Approves Amending Scheme for Orion and London and Overseas” (Dec. 1, 2015), available at http://www.klgates.com/high-court-approves-amending-scheme-for-orion-and-london-and-overseas-12-01-2015/.

[2] See OIC Run-Off Limited, https://www.oicrun-offltd.com/html/default.html (last visited Feb. 15, 2016).