Vermont Gets $205 Million from Failed Ambassador Insurance After 25 Years

October 27, 2008

The state of Vermont has received $205 million in a lawsuit against accounts for an insurance company that went bankrupt a quarter century ago and left about 20,000 people in several states with outstanding claims.

The announcement should bring to a close a long-running battle by state regulators to collect from PriceWaterhouseCoopers, the accounting firm for the defunct Ambassador Insurance Co., said Paulette Thabault, commissioner of the state Department of Banking, Insurance, Securities and Health Care Administration.

“Claimants should know that the long wait is nearly over, and that we expect to be able to fully pay claims by insureds and policyholders, with interest,” Thabault said.

Ambassador, which was incorporated in Vermont but headquartered in New Jersey, operated in seven states. It had about 7,000 policyholders in Vermont when it went bankrupt in 1983.

Vermonters paid $3.5 million in premiums to Ambassador in 2002, its last full year in business.

A lawyer in Thabault’s department, Peter Young, said he did not know how many individual Vermonters will share in the $205 million, but said he thinks the number will be small.

Claimants already have received 86 percent of the money they were owed under settlements reached several years ago, Young said, adding that some of the $205 million will go to guaranty and reinsurance funds.

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