On Friday, the Virginia State Corporation Commission ordered the liquidation of the Reciprocal of America, as reported here by the AP and here by the Daily Press. The SCC's order is available here, and provides among other things that all the direct insurance policies are cancelled.
Reciprocal of America provided malpractice liability insurance for hospitals in several states. It was also a reinsurer for Doctors' Insurance Reciprocal (DIR) and American National Lawyers' Insurance Reciprocal (ANLIR), which sold malpractice insurance for doctors and lawyers respectively. Earlier this month, a court approved the liquidation of ANLIR by officials of the Tennessee Department of Commerce. ANLIR provided malpractice for more than 14,000 attorneys, including several thousand in both Virginia and Tennessee.
What remains unresolved is how what assets remain in the Reciprocal of America and whether ANLIR (and DIR) will be allotted a portion of those assets based on the moneys paid in for lawyers and doctors, or whether those assets will go first to the hospital claims, which will leave nothing for the doctors and lawyers.
A class action lawsuit brought on behalf of ANLIR insured lawyers raising all kinds of claims has been filed in the United States District Court for the Western District of Tennessee at Memphis.
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