FOR IMMEDIATE RELEASE
MILLS BRIEFS FRONTIER EMPLOYEES ON COMPANYS STATUS
Rock Hill, New York--Superintendent of Insurance Howard Mills today addressed the Frontier Insurance Companys 150-plus employees at the insurers headquarters on how a recent State Supreme Court decision will give the New York Liquidation Bureau (NYLB), the agency which acts on behalf of the Superintendent as Receiver, greater flexibility in the ongoing effort to revive Frontiers financial position. The NYLB took possession of Frontier in August 2001 and the insurer has been in rehabilitation since that time.
"The Courts decision enabled Frontier to continue the rehabilitation process," Superintendent Mills stated, referring to Justice Nicholas A. Clementes recent approval of the third amendment to an agreement between the Superintendent of Insurance, acting as Frontiers Receiver, and the National Indemnity Company (NICO). NICO provides reinsurance to the Frontier Insurance Company. The court-approved agreement gives Frontier a combination of debt relief and additional cash.
"The New York State Insurance Department could have placed the Frontier Insurance Company into liquidation four years ago," Superintendent Mills said. "But that would have put each and every Frontier employee out of work and adversely affected Sullivan Countys economy while also sending shock waves through the nations already overburdened guarantee fund system. Instead, New Yorks Liquidation Bureau, in concert with Frontier employees, continues to devote considerable energies to Frontiers emergence from rehabilitation so that it may once again operate as an independent Company."
Superintendent Mills reported during his visit that the NYLB has reduced by $57 million the Frontier Insurance Companys negative surplus over the past four years and paid since August 2001 more than $500 million in claims.
The NYLB carries out the responsibilities of the Superintendent of Insurance as Receiver and acts on his behalf in discharging the Superintendents statutorily defined duties to protect the interests of the policyholders and creditors of insurance companies which have been declared impaired or insolvent.