Bankruptcy of insurance and reinsurance companies in the United States

The word “bankruptcy” scares everywhere except in the United States where it is not perceived as a failure but rather as a hiccup. Debts are written off and a new chance is granted to the company to start anew.

BankruptcyDeeply rooted in American business, bankruptcy is an old practice that dates back to 1800. The United States have, therefore, seen numerous groups and jewels of their economy such as AIG, General Motors or Lehman Brothers collapse in the heat of financial scandals.

Several dozens of insurance companies, including big names in the business, have gone bankrupt in the United States in the course of the recent 30 years.

Bankruptcy of AIG case

AIG was seriously affected by the 2008 financial crisis. Under the pressure of the authorities that questioned some of the group’s practices, the group’s board of directors was pushed to part ways with its historic president Maurice Greenberg on duty for 35 years.

AIG was bailed out by American Federal Reserve (FED) which had to intervene on various occasions to inject the total amount of 205 billion USD. A drastic restructuring plan was then imposed on the group which was compelled to cede a large number of non-strategic assets including subsidiaries Alico in the United States and AIA in Asia.

Bankruptcy of Conseco

Conseco, an insurance company set up in 1979, was estimated at 61.4 billion USD upon its bankruptcy in 2002.

Due to bad investments, including the acquisition of numerous companies in the 1990s, in particular Green Tree Financial, the company was pushed to bankruptcy.

Bankruptcy of Executive Life Insurance Company

Executive Life Insurance Company is regarded to be the biggest bankruptcy of an insurance company in the United States in the course of recent years.

Based in California, the life company had to file for bankruptcy in 1991 following disastrous investments in junk bonds.

Back then, it was the biggest bankruptcy of an insurance company.

List of major bankruptcies of insurance companies in USA

Wind-up dateDate ofcreationCompanyClass of businessHeadquarters
March 20171954
Penn Treaty Network America Insurance Company and its subsidiaries among which American Network Insurance Company
LifePennsylvania
December 20161964
American Medical and Life Insurance Company
Health, life and accidentNew York
February 20152012
CoOportunity Health
Life and healthIowa
January 20152008
SeeChange Health Insurance Company
HealthCalifornia
August 2013-
Executive Life Insurance Company of New York
LifeNew York
May 20131912
Lumbermens Mutual Casualty Company
HealthIllinois
April 20132006
Universal Health Care Insurance Company, Inc.
Accident and HealthFlorida
July 20121934
Standard Life Insurance Company of Indiana
LifeIndiana
January 20111925
Golden State Mutual Life Insurance Company
Life, accident and healthCalifornia
November 20101964
National States Insurance Company
Accident and healthMissouri
May 20101923
Booker T. Washington Insurance Company
Life, accident and healthAlabama
June 20061996
Southern Family Insurance Company
Non lifeFlorida
July 2003-
Legion Insurance Company
Non life, healthPhiladelphia
February 2002-
PHICO Insurance Company
Health, workmen's compensationHarrisburg
October 20011817
Reliance Insurance Company
Life and non lifePhiladelphia
July 20031978
Fremont Indemnity Insurance Company
Health, workmen's compensationLos Angeles, California
September 20001914
California Compensation Insurance Company
Non lifeSan Francisco
February 19871985
Mission Insurance Company
Non lifeSan Francisco
March 1989-
American Mutual Liability Insurance Company
Non lifeFramingham
August 1986-
Midland Insurance Company
Non lifeNew York
December 1985-
Transit Casualty Insurance Company
Non lifeJefferson City
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