Re Continental Assurance Company of London Plc ((in Liquidation))
| Jurisdiction | England & Wales |
| Judgment Date | 18 December 1999 |
| Date | 18 December 1999 |
| Court | Chancery Division |
Chancery Division
Before Mr Justice Carnwath
Insolvency - insurance company - fixing date of voluntary liquidation
The Insurance Companies (Winding Up) Rules (SI 1985 No 95 (L2)) were designed to be a comprehensive code and applied to all liquidations whether compulsory or voluntary.
In order to avoid an otherwise inexplicable anomaly, it was necessary, in the case of a voluntary liquidation, to read the reference to the date of the winding up order, in those paragraphs which referred specifically to a winding up order, as a reference to the resolution which constituted the commencement of the winding up under the Insolvency Act 1986 and the point at which the company went into liquidation.
Mr Justice Carnwath so held in a reserved judgment in the Chancery Division when giving directions under section 112 of the 1986 Act relating to the winding up of Continental Assurance Company of London plc.
The two joint liquidators, Christopher John Hughes and David Julian Buchler were, respectively, applicant and respondent for the purpose of determining whether claims under eight prize indemnity insurance policies and one promotional contingency insurance policy were to be valued on "a just estimate of value" or a "return of premium" basis under the 1985 Rules.
Rule 6 of the 1985 Rules provides: "Except in relation to amounts which have fallen due for payment before the date of the winding up order, the holder of a general business policy shall be admitted as a creditor in relation to his policy without proof for an amount equal to the value of the policy and for this purpose the value of a policy shall be determined in accordance with Schedule 1."
Paragraph 2 of Schedule 1 provides: "(1) This paragraph applies in relation to liabilities under a general business policy not dealt with by paragraph 1.
"(2) The value to be attributed to those liabilities shall (a) if the terms of the policy provide for a repayment of premium upon the early termination of the policy or the policy is expressed to run from one definite date to another . . . Be the greater of the following two amounts (i) the amount (if any) which under the terms of policy would have been repayable on early termination of the policy had the policy terminated on the date of the winding-up order, and (ii) where the policy is expressed to run from one definite date to another . . . such proportion of the...
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