Triad Guaranty Insurance and Triad
Guaranty Assurance agree to being placed into rehabilitation
Dept. of Insurance will present a plan to
address future payment of claims
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[December 13, 2012]
CHICAGO -- Illinois Department
of Insurance Director Andrew Boron announced Tuesday that a
rehabilitation order has been entered by the Cook County Circuit
Court against Triad Guaranty Insurance Corp., known as Triad, and
its subsidiary Triad Guaranty Assurance Corp., known as TGAC, with
the consent of their respective boards of directors. The court also
entered a finding of insolvency against Triad.
Both companies, located at 101 S. Stratford Road, Winston-Salem, N.C., were
formerly authorized to transact the business of mortgage guaranty insurance,
which insures banking institutions for financial loss associated with
residential mortgage defaults. The companies ceased issuing new commitments for
mortgage guaranty insurance in 2008 and have been operating their business under
two corrective orders issued by the Department of Insurance.
Under Illinois law, the director of the Department of Insurance is appointed
as statutory rehabilitator of both companies involved. Generally, a
rehabilitation order allows the department director to restructure an insurance
company's business. The restructuring or "run-off" involves taking over the
affairs of a company but not taking on new obligations or issuing new or
renewing policies. The director is vested with title to the company's property,
assets, rights of action or lawsuits, books, records, and premises.
In accordance with the Illinois Insurance Code, the director is charged with
preparing and presenting a rehabilitation plan to address future payment of the
claims of creditors, including mortgage lenders Fannie Mae, Freddie Mac and
other mortgage banking institutions. Boron expects to file a rehabilitation plan
with the supervising court in approximately 45 days.
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"I want to commend the Triads' boards and management for their
commitment and cooperation during this transition," said Boron. "The
department will have oversight and management authority over Triads'
business and affairs. And we are committed to working in the best
interest of Triads' creditors."
A copy of the rehabilitation order is available at
www.osdchi.com or can be
obtained by calling the Office of the Special Deputy Receiver at
312-836-9500. The address of that office is 222 Merchandise Mart
Plaza, Suite 960, Chicago, IL 60654. The office is assisting Boron
with the rehabilitation of Triad and TGAC.
Illinois Department of
file received from
Illinois Office of
Communication and Information]