The Superintendent of Financial Institutions moved today to protect the remaining policyholders and creditors of Alta Surety Co. by taking control of the company.

Alta is a small, closely-held fidelity and surety insurance company, with three employees, based in Montreal. It specializes in the issuance of surety bonds guaranteeing the completion of construction contracts.

With the agreement of the Office of the Superintendent of Financial Institutions, Alta had not written any new business and had been managing an orderly run-off of its liabilities since 1992; however, in recent months its cash flow position began to deteriorate to the point where it did not expect to be able to meet all its future liabilities. The Superintendent is of the opinion that the assets of the company are not sufficient to give adequate protection to the policyholders and creditors of the company.

The Superintendent has asked the Attorney General of Canada to apply for a winding-up order and appointment of a liquidator to oversee the orderly and equitable distribution of funds to policyholders and creditors. In the interim, OSFI will manage the business and affairs of the company.

Approximately 11 companies with outstanding claims against Alta will be affected by today’s action.