VT Collects $205 Million to Pay Claimants and Creditors of Ambassador Insurance Co.

Montpelier, VT (CompNewsNetwork) - Paulette J. Thabault, Commissioner of the Vermont Department of Banking, Insurance, Securities and Health Care Administration (BISHCA), announced today that Vermont has collected $205 million for Vermont-domiciled Ambassador Insurance Company from the accounting firm of PriceWaterhouseCoopers. Commissioner Thabault stated that these monies will allow Ambassador policyholders and claimants to receive the insurance proceeds they were due under Ambassador insurance policies. "As a Department, we're committed to protecting the interests of policyholders, and pleased that the years of work in connection with these receivership proceedings should allow us to make full payment to all policyholders," Thabault said. The $205 million includes damages and interest awarded in connection with a malpractice lawsuit against the accountants responsible for negligently auditing Ambassador's financial statements.

Commissioner Thabault is the court-appointed receiver for Ambassador, and confirms these funds will now be used to pay persons insured and owed money by Ambassador. Said Commissioner Thabault, "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."

Some claimants have been approached by companies offering to buy claims and pay only a percentage of the money owed instead of the full amount to be received by waiting for the end of the process. While such an assignment is allowed, claimants should be aware that it may not be in their best interest as the amount offered may not take into account the additional interest to be paid on approved claims.

In the accounting malpractice lawsuit now concluded, Ambassador's outside accountants were charged with negligence in connection with audits of Ambassador's financial statements that concealed the insurance company's true financial weakness and near insolvency from regulators. A nine week trial in federal court in Newark, NJ, resulted in a jury verdict against Defendants PriceWaterhouseCoopers and the estate of Arnold Chait, Ambassador's former President. The 2005 verdict and PriceWaterhouseCooper's obligation to pay all of the resultant damages was affirmed on appeal by the U.S.Court of Appeals for the Third Circuit.