The word bankruptcy causes fear worldwide except for the United States where it is not perceived as a failure but rather as a setback. Debts are written-off and a second chance is granted to the company to start anew.
Deeply rooted in American business, bankruptcy is an old practice that dates back to 1800. The United States have, therefore, seen numerous groups and jewels of their economy such as AIG, General Motors or Lehman Brothers collapse in the heat of financial scandals.
Several dozens of insurance companies, including big names in the business, have gone bankrupt in the United States in the course of the recent 30 years.
Bankruptcy of AIG case
AIG was seriously affected by the 2008 financial crisis. Under the pressure of the authorities that questioned some of the group’s practices, the group’s board of directors was pushed to part ways with its historic president Maurice Greenberg on duty for 35 years.
AIG was bailed out by American Federal Reserve (FED) which had to intervene on various occasions to inject the total amount of 205 billion USD. A drastic restructuring plan was then imposed on the group which was compelled to cede a large number of non-strategic assets including subsidiaries Alico in the United States and AIA in Asia.
Read also | AIG, between bankruptcy and recovery
Bankruptcy of Conseco
Conseco, an insurance company set up in 1979, was estimated at 61.4 billion USD upon its bankruptcy in 2002.
Due to bad investments, including the acquisition of numerous companies in the 1990s, in particular Green Tree Financial, the company was pushed to bankruptcy.
Bankruptcy of Executive Life Insurance Company
Executive Life Insurance Company is regarded to be the biggest bankruptcy of an insurance company in the United States in the course of recent years.
Based in California, the life company had to file for bankruptcy in 1991 following disastrous investments in junk bonds.
List of major bankruptcies of insurance companies in USA
Wind-up date | Date ofcreation | Company | Class of business | Headquarters |
---|---|---|---|---|
28/09/2022 | 1983 | FedNat Insurance Company | Property damage | Florida |
08/08/2022 | - | Weston Property & Casualty Ins. Co. | Property damage | Florida |
16/06/2022 | 2005 | Southern Fidelity Insurance Co. | Property damage | Florida |
29/04/2022 | 1983 | Lighthouse Property Insurance Corp. | Property damage | Florida |
14/03/2022 | 2008 | Avatar Property & Casualty Insurance Company | Property damage | Florida |
25/02/2022 | 2004 | St. Johns Insurance Company | Property damage | Florida |
Mach 2021 | - | Bedivere Insurance Company | Workmen'’'s compensation, motor, non-life | Pennsylvania |
September 2019 | - | Senior American Insurance Co. | Non-life | Pennsylvania |
January 2018 | 2002 | Healthcare Providers Ins. Exchange | Medical professional third-party liability | Pennsylvania |
March 2017 | 1954 | Penn Treaty Network America Ins. Co. & its subsidiaries | Life | Pennsylvania |
December 2016 | 1964 | American Medical and Life Ins. Co. | Health, life and accident | New York |
February 2015 | 2012 | CoOportunity Health | Life and health | Iowa |
January 2015 | 2008 | SeeChange Health Ins. Co. | Health | California |
August 2013 | - | Executive Life Ins. Co. of New York | Life | New York |
May 2013 | 1912 | Lumbermens Mutual Casualty Co. | Health | Illinois |
April 2013 | 2006 | Universal Health Care Insurance Co. | Accident and health | Florida |
July 2012 | 1934 | Standard Life Ins. Co. of Indiana | Life | Indiana |
January 2011 | 1925 | Golden State Mutual Life Insurance Company | Life, accident and health | California |
November 2010 | 1964 | National States Ins. Co. | Accident and health | Missouri |
May 2010 | 1923 | Booker T. Washington Ins. Co. | Life, accident and health | Alabama |
June 2006 | 1996 | Southern Family Ins. Co. | Non-life | Florida |
July 2003 | - | Legion Insurance Company | Non-life, health | Philadelphia |
February 2002 | - | PHICO Insurance Company | Health, occupational accidents | Harrisburg |
2002 | 1979 | Conseco | Insurance and finance | Indiana |
October 2001 | 1817 | Reliance Insurance Company | Life and non-life | Philadelphia |
July 2003 | 1978 | Fremont Indemnity Ins. Co. | Health, workmen's compensation | Los Angeles, California |
September 2000 | 1914 | California Compensation Ins. Co. | Non-life | San Francisco |
February 1987 | 1985 | Mission Insurance Company | Non-life | San Francisco |
March 1989 | - | American Mutual Liability Ins. Co. | Non-life | Framingham |
August 1986 | - | Midland Insurance Company | Non-life | New York |
December1985 | - | Transit Casualty Insurance Company | Non-life | Jefferson City |
April 1991 | - | Executive Life Insurance Company | Life | California |
Source: National Organization of Life and Health Insurance Guaranty Association
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