AA Mutual International Insurance Company (AMMII) has gone into administration with PricewaterhouseCoopers (PWC) appointed to oversee the process.
AMMII went into administration voluntarily after its directors concluded that there was insufficient certainty that the company's insurance operations could be run-off on a solvent basis, said administrators Nigel Rackham and Dan Schwarzmann.
The company went into administration on 23 July.
PWC said this was the first time an insurance company has been placed into administration following the Enterprise Act 2002 together with the Insurers (Reorganisation and Winding Up) Regulations 2004.
As a result policyholders that have insurance contracts with AAMII will have priority over the claims of other creditors, including policyholders that have reinsurance contracts with AAMII.
Rackham, said: “As a priority I will be seeking to determine the financial position of AAMII. I will also be working with policyholders to develop a plan to enable liabilities to be paid, even if it is only part payments, at the earliest opportunity.”
PWC said it is probable that a Scheme of Arrangement under section 425 of the Companies Act will be proposed to creditors in due course.
“At this stage it is not possible to predict the ultimate proportion of each policyholder's agreed claims that will be paid by AAMII under the administration or any future Scheme of Arrangement,” said the company.
Policyholders should continue to submit claims information to the company in the normal manner, it added.
AAMII is a wholly owned subsidiary of Hampden Insurance Group Limited. It was, until 2002, owned by AA Mutual Insurance Holdings Limited, a South African company. There is no connection with The Automobile Association in the UK.
AAMII underwrote reinsurance and a small amount of direct insurance business, specifically including casualty, marine, property and aviation business. It ceased writing business and went into run-off in December 1986.
