KWELM CREDITORS BACK EARLY CLOSURE OF RUN-OFF

Creditors of the five insolvent KWELM insurance companies have confirmed their support for a scheme which could close the insolvency run-off years ahead of the original schedule. Early closure would offer creditors the prospect of receiving total payments ranging between 58% and 76% of sums due, compared with average distributions to date of 47%. The KWELM companies — Kingscroft Insurance, Walbrook Insurance, El Paso Insurance, Lime Street Insurance and Mutual Reinsurance — are at the centre of the largest-ever general insurance insolvency. The firms, which were units of the failed London United Investments, had total debts estimated at $10.6bn, with creditors mostly concentrated in the US. The early closure plans envisage that the bulk of the $1.3bn being held for payment to creditors will be paid within three years, well ahead of the timescale that scheme administrators Chris Hughes and Ian Bond had originally envisaged of payments being made up to 2015.