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Municipal Mutual Insurance
MMI was the predominant insurer of public sector bodies prior to ceasing its underwriting operations in September 1992. It entered into a Scheme of Arrangement in 1993. Although MMI directors are committed to run-off with full payments of agreed claims, the liabilities have continued to deteriorate in recent years. The situation may also be worsened with the High Court ruling in 2008 on the ‘mesothelioma trigger litigation’ and is exposed to the effect of similar developments in future.
With many elements of uncertainty surrounding MMI’s liabilities, if insolvency is considered unavoidable, then the Scheme Creditors would be subject to a levy. The size of the levy depends on the amount paid to the Creditors since September 1993. Subsequent to this levy, any liabilities or elective defence costs payments made by MMI will be made at a reduced rate, leaving their Creditors to fund the shortfall.
We can advise on the potential ‘amount liable’ to clawback by MMI in the event of insolvency, based on MMI’s latest published accounts. A management letter including an abstract of MMI’s voluntary insolvency, financial position and levy arrangements, latest developments and potential liabilities to the organisation is provided.