Creditors back 'first of its kind' scheme of arrangement
Creditors of R&Q Re have unanimously voted for a scheme of arrangement which the company said was unique in Bermuda.
The scheme, which was approved by the Bermuda Supreme Court last week, is designed to protect creditors from the disruption, delays and significant costs associated with an insolvency process.
“The terms of this scheme of arrangement create a structure that provides for a solvent resolution that is binding on creditors of the company without the need for an insolvency process,” said Parri Spector, Director of R&Q Re (Bermuda . “The company is grateful for the support it received from the Bermuda Monetary Authority and for the expert advice and guidance provided by PwC and Conyers.”
Dan Schwarzmann, who was appointed scheme supervisor, and PwC partner, added: “Schemes of arrangement are flexible tools that can add value in many ways. I am delighted to see it being used in the Bermuda market in this manner and am grateful to the BMA for their support from when the idea was taken to them and then throughout the process.
“This innovative scheme of arrangement has provided a solution to enable the company to avoid insolvency and the inevitable associated disruption and costs, resulting in tangible value for creditors.”
Christian Luthi, chairman of law firm Conyers, who acted for the company, said: “This particular scheme is the first of its kind in Bermuda and can serve as a useful blueprint for similar situations in the future.
“It demonstrates this jurisdiction’s commitment to flexible, cost-effective solutions that protect creditors and ensure the stability of Bermuda’s (re)insurance market.”
R&Q Re is part of R&Q Insurance Holdings, which filed for provisional liquidation in Bermuda last year as it completed the sale of its subsidiary Accredited to Canadian investment firm Onex.
Separately, Skyward Specialty Insurance announced today it had commuted its loss portfolio transfer and adverse development and retrocession agreement with R&Q Re (Bermuda) Ltd. related to accident years 2018 and prior.
Skyward said it received $11.7 million in cash. Additionally, at December 31, 2024 the Company strengthened LPT loss reserves by $25.3 million and recognised approximately $9.8 million, net of tax, of uncollectible reinsurance recoverable from R&Q.
Skyward Specialty chairman and chief executive officer Andrew Robinson said: "We are pleased to have completed the commutation of the LPT and remove future reinsurance recoverable credit risk related to this portfolio. We believe our reserve charge represents a conservative view of the ultimate losses at December 31, 2024."
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