§ Mr. Harry GreenwayTo ask the President of the Board of Trade what changes he proposes to the legislation relating to insolvent non-life insurance companies. [13144]
§ Mr. NelsonMy Department issued a consultative document in December 1994 on proposals for dealing with insolvent non-life insurance companies. The proposals seek to provide a more satisfactory legal basis for dealing with the affairs of an insolvent non-life insurance company through a scheme of arrangement under section 425 of the Companies Act 1985, developed in a period of provisional liquidation. Responses to the consultative document generally supported a change in the law and I therefore propose to bring forward legislation, when parliamentary time permits. The principal features of the new arrangements would be
provision for an insolvent insurance company to apply to the court for a stay on proceedings against it by unsecured creditors while a scheme of arrangement is being drawn up;some modifications to the requirements of section 425 of the Companies Act 1985, for the purposes of schemes subject to the new provisions;provision for the insolvency practitioner overseeing an agreed scheme to have certain powers, in relation to fraudulent and wrongful trading and preferences and undervalues, which are not currently available to the administrators of section 425 schemes.