Dyoll Liquidators settle suit against Canadian Reinsurer

Sabrina Gordon (Jamaica Gleaner)–A year after joint liquidators of Dyoll Insurance Company Limited brought a suit against Aon Benfield Canada, formerly Aon Re Canada, in Jamaica’s Supreme Court claiming US$19.86
million, on allegations of negligence in its dealings as reinsurance broker for the failed general insurance company, the parties have reached an out-of-court settlement.

Aon had denied the allegations.

According to a newspaper notice last weekend, the parties have agreed to a settlement of the claim in advance of the court hearing, set for later this month.

But neither the liquidators, John Lee of PwC and Kenneth Krys of Krys & Associates based in the Cayman Islands, nor Aon Benfield Canada, was willing to disclose details of the settlement.

“This settlement is viewed by the parties as mutually beneficial as it will avoid lengthy and potentially high cost of protracted litigation which would have been inevitable if this matter were to run its course through the courts,” the notice said.

The joint liquidators sued Aon Benfield Canada in February 2010, claiming it was responsible for the collapse of Dyoll Insurance Company.

Inadequate Reinsurance

At that time, Lee said they examined the cause of the collapse and found it to be caused by the purchase of inadequate reinsurance on the advice of Aon Re.

But the allegations were adamantly denied by Aon Re, and a position taken “to fight it vigorously”.

While a settlement has now been reached, the notice said that neither party made any admissions or findings of liability.

It said, however, that Aon Re would have to pay an undisclosed sum of money to Dyoll.

Dyoll Insurance went bankrupt after it was swamped with claims after Hurricane Ivan devastated properties and crops in September 2004.

Dyoll wrote coverage for properties in both Jamaica and Cayman, but it was mostly claims in the latter island which sent the insurer into insolvency.

The Financial Services Commission, the regulator of insurance companies in Jamaica, took over Dyoll – then controlled by the Thwaites family – and later placed it in receivership after selling off a portion of its insurance portfolio to the GraceKennedy-owned Jamaica International Insurance Company Limited.

Since the company was placed in receivership, the joint liquidators of Dyoll have paid out 70 cents in the dollar to creditors, which number in excess of 4,000.

With the settlement of the suit, the notice said, liquidators intend to declare a further dividend later this year upon completion of the settlement terms.

“Such further dividend, to be paid with proceeds of the settlement and other funds, will mean that creditors will receive over 80 per cent of their admitted claims in Dyoll,” the notice read.

Dividends paid so far are in excess of 65 per cent of claims submitted.