Bankruptcy of insurance and reinsurance companies in the United States

The word bankruptcy causes fear worldwide except for the United States where it is not perceived as a failure but rather as a setback. Debts are written-off and a second 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.

List of major bankruptcies of insurance companies in USA

Wind-up dateDate ofcreationCompanyClass of businessHeadquarters
28/09/20221983FedNat Insurance CompanyProperty damageFlorida
08/08/2022-Weston Property & Casualty Ins. Co.Property damageFlorida
16/06/20222005Southern Fidelity Insurance Co.Property damageFlorida
29/04/20221983Lighthouse Property Insurance Corp.Property damageFlorida
14/03/20222008Avatar Property & Casualty Insurance CompanyProperty damageFlorida
25/02/20222004St. Johns Insurance CompanyProperty damageFlorida
Mach 2021-Bedivere Insurance CompanyWorkmen'’'s compensation, motor, non-lifePennsylvania
September 2019-Senior American Insurance Co.Non-lifePennsylvania
January 20182002Healthcare Providers Ins. ExchangeMedical professional third-party liabilityPennsylvania
March 20171954Penn Treaty Network America Ins. Co. & its subsidiariesLifePennsylvania
December 20161964American Medical and Life Ins. Co.Health, life and accidentNew York
February 20152012CoOportunity HealthLife and healthIowa
January 20152008SeeChange Health Ins. Co.HealthCalifornia
August 2013-Executive Life Ins. Co. of New YorkLifeNew York
May 20131912Lumbermens Mutual Casualty Co.HealthIllinois
April 20132006Universal Health Care Insurance Co.Accident and healthFlorida
July 20121934Standard Life Ins. Co. of IndianaLifeIndiana
January 20111925Golden State Mutual Life Insurance CompanyLife, accident and healthCalifornia
November 20101964National States Ins. Co.Accident and healthMissouri
May 20101923Booker T. Washington Ins. Co.Life, accident and healthAlabama
June 20061996Southern Family Ins. Co.Non-lifeFlorida
July 2003-Legion Insurance CompanyNon-life, healthPhiladelphia
February 2002-PHICO Insurance CompanyHealth, occupational accidentsHarrisburg
20021979ConsecoInsurance and financeIndiana
October 20011817Reliance Insurance CompanyLife and non-lifePhiladelphia
July 20031978Fremont Indemnity Ins. Co.Health, workmen's compensationLos Angeles, California
September 20001914California Compensation Ins. Co.Non-lifeSan Francisco
February 19871985Mission Insurance CompanyNon-lifeSan Francisco
March 1989-American Mutual Liability Ins. Co.Non-lifeFramingham
August 1986-Midland Insurance CompanyNon-lifeNew York
December1985-Transit Casualty Insurance CompanyNon-lifeJefferson City
April 1991-Executive Life Insurance CompanyLifeCalifornia

Source: National Organization of Life and Health Insurance Guaranty Association

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