Royal and SunAlliance (R&SA) moved closer to offloading its troubled US division after a Michigan court ruled General Motors is not entitled to claim coverage on its potential $1bn asbestos liabilities.
The case was thrown out of court in the week regulators recommended R&SA plans for an eventual sale of its US subsidiary could get the green light within the month.
A public hearing last Friday held by the Delaware insurance commissioner concluded that R&SA's US division's reserves were reasonably stated and the division was solvent enough to be a viable long-term insurer.
Arrowpoint, a company set up by R&SA's US management, is the most likely buyer though sources said an auction among venture capitalists could ensue.
R&SA said in a statement the disposal would be included in its 2006 results. It estimated the write down plus the loss for the year at £480m.
An R&SA spokesman said the commissioner would decide within the next month on the exact deadline of the deal.
He added that the criticism levied by World Trade Center policyholders last week that the insurer had paid only £2.8m in losses was completely wrong."We have paid over £1bn in claims," he said.
