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Widespread overrun by insurers, reinsurers, called PG & E bankruptcy proceedings



United States, London, and Bermuda insurers and reinsurance companies are among those mentioned in a regular court order to maintain policies such as Pacific Gas & Electric Co. submitted as part of its application for bankruptcy protection Tuesday.

"Continuation of the insurance policies is crucial to the ongoing operations of the debtor business," said San Francisco-based PG & E-based lawyers in the proposal to maintain insurance filed with the US bankruptcy court for the Northern District of California.

An application to uphold insurance cover is common in a bankruptcy procedure and "one of the critical motions that must be brought to the hearing because the debtor must continue his normal business immediately and need approval from the bankruptcy law to do so", according to Dennis Nolan, shareholder of New York office in Anderson Kill PC and co-chair of the company's bankruptcy group.

"You can get a situation where a catastrophic event occurs that could weaken the company's ability to reorganize," said Mr. Nolan. "If something like that happens with PG & E, the financial consequences if they didn't have insurance that could react would be catastrophic."

No fewer than 1

21 liability insurance and property insurance policies, including 23 excess liability insurance and reinsurance policies that were in place by November 2018, California wildernesses, are listed in PG & E's business to maintain insurance.

The list shows that PG & E has a 5 year surplus liability policy from Berkshire Hathaway's National Fire and Marine Insurance Co. With an annual premium of $ 136.5 million, for example, held on August 1, 2018, that policy has the highest annual contribution for all excess liability policies identified in the judicial act.

New York-based Allied World Assurance Co. also wrote an excess liability insurance for PG & E with the next highest annual premium of $ 35.9 million, the business showing.

PG & E secured the $ 200 million disaster band for an annual premium of $ 26.8 million and the tool also has a captivity via Energy Insurance Services Inc., a unit in Tampa, Florida-based excess insurance company Energy Insurance Mutual Ltd [19659002] The tool also has a surplus liability policy that costs $ 22 million from the energy sector's mutual insurance company Associated Electric & Gas Insurance Services Ltd based in East Rutherford, New Jersey, of which it is a member.

Just because an excess policy has a higher premium, it cannot mean that these insurance companies offered higher limits for PG & E, according to industr.

In this case, it may mean that some insurance companies only provide limited capacity at very high rates. returns, the sources said.

"I think the premium would reflect higher limits, but there are other factors that record it," says Mr Nolan. "Available limits are a very big factor, but there are also potential exclusions that the policyholder does not want in his policy so that it would negotiate these exceptions and thereby pay a higher premium for it."

As previously reported, PG & E faces lawsuits from property owners and some insurers who claim that the lack of maintenance of their transmission lines caused the fires.

Insurers have brought $ 17 billion of claims against the tool related to property losses from fires, according to PG & E filing. PG & E estimates that its debts to insurance companies and victims can exceed $ 30 billion, not including penalties.

                    


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