The rehabilitation and liquidation processes
When an insurance company is placed in rehabilitation, the insurance department of the state in which the insurer is incorporated seizes control of the operations of the troubled company. The department may then take steps, like suspending the payment of claims, searching for sources of capital and putting on hold any lawsuits against the company, to help return the company to stability. If the initiated steps don’t work, the final step would be for the department to place the company in liquidation. Liquidation means the insurance department would close the company’s affairs by selling assets to pay for outstanding claims and obligations.
Ohio rehabilitation activity
The Ohio Department of Insurance placed the following insurers into rehabilitation during 2000:
- Total Health Care Plan, Inc.—July 26
- Credit General Insurance Company—November 6 (liquidation on January 5, 2001)
- Credit General Indemnity Company (subsidiary of Credit General Insurance Company)—November 21 (liquidation on December 12)
- Acceleration National Insurance Company—November 29
- Proliance Insurance Company—December 28
