PACICC seeks changes to Canada’s Winding Up and Restructuring Act

The Property and Casualty Insurance Compensation Corporation (PACICC) is making it a priority in 2008 to seek changes to Canada’s Winding Up and Restructuring Act (WURA).
The organization said in its 2007 annual report it would be preparing to lobby the government on the following issues related to WURA, among others:
the scope of legislation for restructuring or rehabilitating an insolvent insurance company;
clarification of the inspector’s role in the winding-up of insurance companies to help ensure PACICC’s involvement in key decisions;
modifications to deal more effectively with the liquidation of a financial conglomerate;
shortening the time period required to full wind-up an insolvent insurance company (“more than 15 years in some cases,” the PACICC report notes).
PACICC said in 2008 it plans to build consensus in the industry about what needs to change in the WURA.
In addition, it would enhance government awareness of the need for change, as well as seek to implement any improvements to the current liquidation process.
Such improvements would “focus on implementing improvements to the liquidation process, including: utilizing loan agreements as a standard procedure in liquidationsadopting a new model winding-up order, and clearer rules governing reinsurance.”
In June 2000, the Insolvency Institute of Canada reviewed WURA and prepared recommendations, noting its effort “appears to be the first of its kind on the history of the statute and seems, at least in hindsight, to be long overdue.”