The applicability of solvent schemes of arrangement in Germany

In 2007, a two part article* published in the German insurance journal Versicherungswirtschaft on whether solvent schemes of arrangement are effective under German and EU law made a powerful case for casting doubt on the validity of such schemes under German law. Here, Vivien Tyrell , a partner, and Nick Stern , an associate, in the London office of law firm Edwards Angell Palmer & Dodge and Philip Heitlinger , executive director at PRO Insurance Solutions, consider the arguments put forward in the Versicherungswirtschaft article from both a commercial and legal standpoint

Solvent schemes of arrangement have emerged in the last five or so years as a uniquely powerful procedure to achieve rapid and legally binding closure of insurance and reinsurance companies. What had previously been thought of as an impossible objective has been achieved at an ever-increasing rate in common law jurisdictions such as England, Scotland, Ireland, Bermuda, Australia and New Zealand.