News
Deutsche Ruck scheme sanctioned
25 June 2009
Chiltington International has announced that the solvent scheme of arrangement for Deutsche Ruck UK Reinsurance (DRUK) was sanctioned by the High Court on 16 June. The scheme was approved at a creditors’ meeting in May. DRUK is the UK subsidiary of Dusseldorf based Deutsche Ruckversicherung AG (DRAG).
The scheme business consists of reinsurance business written by DRUK in London together with two portfolios of reinsurance business transferred from DRAG to DRUK in October 2007. These transfers were the first to be carried out under German law similar to the UK’s Part VII transfer. Chiltington and law firm Sidley Austin acted as advisers to both the transfers and the solvent scheme of arrangement.
 Juergen Rehmann, MD of DRUK (pictured), says the scheme is notable for its ease of use for creditors: ‘Examples of the features to achieve this are that there is no so-called “ascertainment date” which forces creditors to value their claims at a specific date, and the provision of long tail claim benchmark data in the claims validation methodology for optional use by creditors, particularly those without their own data.’
Ian Marshall, group head of consulting at Chiltington, says: ‘Predictions that Continental European insurers and reinsurers will increasingly look to consolidate legacy business into the London market have been given an added fillip by DRUK’s achievements.’
Nigel Montgomery of Sidley Austin comments: ‘The transfer of business within insurance groups is likely to increase in anticipation of Solvency II given the savings that can be achieved by consolidating run-off, as well as the potential to apply schemes of arrangement where they are appropriate.’
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