FurtherFAQ |
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The contents of this website are not a substitute for the contents of
the Scheme document (which includes the Scheme and the Explanatory
Statement). Scheme Creditors (as defined in the Scheme) should read and
consider carefully the full text of the Scheme document.
Frequently Asked Questions - Claims
Submission 1 What is the
current timetable of key elements?
2 What
happens next?
3 If I
have submitted a Claim Form with additional values, what documentation do
I need to supply?
4 How long do I
have to supply supporting documentation?
5 What can I do
if I wish to make amendments to my Claim Form?
6 Can I be sure
that my Scheme Claim will be valued fairly?
7 When will
payment be made?
Please also refer to the Background
FAQs. These FAQs provide important information to Creditors in
relation to the background to the WFUM schemes.
In addition section 8 of the Explanatory Statement includes a number of
questions and answers: this document is held on the Scheme
documentation page of the website.
1 What is the current timetable of key
elements?
It is difficult to be precise at this stage as to
when certain remaining key elements of the scheme process will take place
due to the uncertainties over how long some aspects will take to resolve.
However the remaining key elements are as follows:
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- Review of Scheme Claims to be completed by the Scheme
Manager
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91 days after the Bar Date |
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- Bar Date for all Scheme Companies other than Sphere Drake
- Sphere Drake only Bar Date
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7 April 2008
6 May 2008 |
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2 What happens next?
After the Bar Date PRO will begin issuing Valuation Statements to
Scheme Creditors whose Scheme Claims have been agreed. The Valuation
Statement shows the total amount of a Scheme Creditors Agreed Claims and
will show the calculation of any outwards reinsurance, or Scheme Debt,
that is to be set off.
Under the Scheme, set-off will be carried out between each Scheme
Company and its Scheme Creditors, rather than at pool level. However,
Scheme Creditors will also be provided with a ‘Combined Valuation
Statement’, aggregating their Valuation Statements in respect of each of
the Scheme Companies. Scheme Creditors have the option of accepting this
aggregated set-off and receiving a single payment on behalf of all of the
Solvent Scheme Companies to which the Valuation Statement relates.
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3 If I have submitted a Claim Form with additional
values, what documentation do I need to supply?
The Scheme Document states that where policies and values have been
added to the Claim Forms then these additions must be substantiated with
appropriate supporting documentation:
Examples of appropriate supporting documentation are as follows:
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- Additional policies – a copy of the cover note / slip or other
appropriate document, including details of the Scheme Company
participation.
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- Additional Unpaid Claims – a copy of the closing advice and
any supporting documentation sent to the broker.
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- Outstanding Claims – a copy of the loss advices and any
supporting documentation sent to the broker.
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- IBNR Claim estimates – details of the method and calculation
used to estimate IBNR claims, including a copy of the relevant
Actuarial or other expert reports where appropriate.
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- Discounting Percentage – where a different discounting
percentage has been used to that proposed by the Scheme Manager
for either Outstanding Claims or the IBNR Claims then
justification for the percentage is required.
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4 How long do I have to supply supporting
documentation?
It is recommended that supporting
documentation is supplied at the time your Claim Form is submitted. In any
event all documentation must be supplied to the Scheme Manager within 7
days after the Bar Date or the Scheme Manager will be entitled to
disregard it.
5 What can I do if I wish to make amendments to my Claim
Form?
There is no provision in the Scheme Document for
Scheme Creditors to alter the value on their Claim Form after the Bar
Date. The Scheme Manager is therefore unable to accept amendments to a
Claim Form.
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6 Can I be sure that my Scheme Claim will be valued
fairly?
The data on the Claim Forms and the supporting evidence will be
reviewed by the Scheme Manager. The Scheme Manager and Scheme Creditor
have up to 6 months from the Bar Date to reach agreement on the value of
Scheme Claims. Both the Scheme Manager and the Scheme Creditor have a duty
to co-operate with each other in trying to reach a mutually agreed value
for Scheme Claims.
If agreement has not been reached within the 6 month period with regard
to an issue of fact or law, it will be passed to a Scheme Adjudicator for
determination. Each party can make submissions to the Scheme adjudicator
and see submissions made by the other. The choice of a Scheme Adjudicator
is to be agreed by the Scheme Manager and the relevant Scheme Creditor
although if they cannot agree on a nominee, the Scheme Manager will
request the Chairman of ARIAS UK to appoint a Scheme Adjudicator in
accordance with the Scheme's requirements.
If, within 6 months of the Bar Date, agreement cannot be reached as to
the valuation of IBNR and outstanding elements of the Scheme Claim, and
once any factual or legal issues affecting it have been resolved by
agreement or Adjudication, these elements of the claim will be valued by
the Scheme Actuary, a recognised expert in the insurance market.
The Scheme Actuary will use the detailed Estimation Methodology for
fairly valuing disputed Scheme Claims. The Estimation Methodology is set
out in Appendix B to the Scheme. However, if a Scheme Creditor has applied
their own methodology to valuing the Scheme Claim, the Estimation
Methodology requires the Scheme Actuary to take this into account if he
considers that it is more appropriate.
If a Scheme Creditor does not agree with the Scheme Actuary's valuation
of the Scheme Claim, the claim will be referred to an independent
Actuarial Adjudicator who will decide whether the Estimation Methodology
was correctly applied.
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7 When will payment be made?
Payment will be made by the solvent Scheme Companies within 42 days of
the date when the Valuation Statement becomes binding. The date of the
Valuation Statement being issued will vary depending on the type of Scheme
Creditor. For direct creditors (Scheme Creditors who are not reinsurers of
a Scheme Company) it is feasible that payments could be made as early as
42 days after the Effective Date, should a claim be submitted by the
Scheme Creditor and agreed by the Scheme Manager immediately after the
Effective Date. For Scheme Creditors who are reinsurers, Valuation
Statements will be issued later, once Agreed Claims have been applied by
the Scheme Manager to the WFUM Pools’ reinsurance programme.
Scheme Creditors also have the option to agree in writing a Net
Ascertained Claim via a commutation at any point after the Effective Date.
Such commutations will be paid within 42 days of their agreement.
Due to its insolvency, and the need to realise the value in its
subsidiaries as well as other factors, Sovereign may need to review its
Payment Percentage after the Bar Date. The Payment Percentage on the
Effective Date will be 40%. As a result it will make payments of dividends
later than the payments made by Solvent Scheme Companies. The Scheme
provides that these will be made up to the later of 105 days after the
relevant Valuation Statement has become binding, or the date on which the
Payment Percentage has been increased.
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