Ambassador Insurance Company case update

 Editorial note: In recent months BISHCA has issued a series of press advisories relating to the AmbassadorInsurance Company case which covered a court judgment against Ambassador’s auditors in favor of BISHCA, aswell as an advisory concerning proposed distributions to claimants, and other details. This release concerns actualdistribution of money to claimants, with some additional details regarding guaranty fund protections available toVermonters. Prior press releases can be found on the BISHCA website: www.bishca.state.vt.us (click on NewsReleases).State Approves $105 Million Distribution toClaimants of Ambassador Insurance Company in ReceivershipMontpelier, Vermont—Banking, Insurance, Securities and Health Care Administration (BISHCA), announced today thatthe process of distributing an additional $105 million to claimants insured by AmbassadorInsurance Company began last week. Ambassador was a Vermont domiciled insurance companywith its headquarters in New Jersey when it was seized by the Department as insolvent. WhileVermont claimants were generally protected by the Vermont Insurance Guaranty Fund and werepaid years ago, many of the Ambassador claimants in other states have only received partialpayment over the years and had to wait until now for final payment from the company. “It isgreat news,” said Commissioner Thabault, “that after all this time those who relied uponAmbassador for insurance are being paid in full and with interest.”More than five thousand checks were issued last week to policyholders, according toGeorge Bernstein who has administered the company since it was seized in 1983. "It’s been along hard road,” said Bernstein, “and I share Commissioner Thabault’s gratitude that we’vereached the point where the approved claims of policyholders and claimants can be paid in full,with interest to help make up for the long wait for payment. Not only is it exceedingly rare for aliquidator of a casualty insurer to be able to pay such claims in full, but I believe that Vermont isthe only state where claimants in an insurance liquidation are paid such interest."The payment is made possible in large part due to the Department’s pursuit ofAmbassador’s former accountants for damages related to negligent accounting, confirmedDepartment attorney Peter Young. In the accounting malpractice lawsuit, Price WaterhouseCoopers had to pay $205 million after it was judged liable for negligent audits of Ambassador’sfinancial statements that concealed the insurer’s true financial weakness, money now available topay Ambassador’s debts.--30-- flPaulette J. Thabault, Commissioner of the Vermont Department of