The Superintendent of Financial Institutions moved to protect the remaining policyholders and creditors of the Canadian branch of the Reliance Insurance Company by taking control of the branch.

Located in Toronto, the branch operation employs 16 people and underwrites mainly commercial business, including property, general liability and professional liability. Due to financial difficulties experienced by Reliance Insurance Company in the U.S., OSFI had taken steps in August 2000 to freeze the assets held in Canada. In early 2001, OSFI directed the branch to stop writing new business.

In May of this year, Reliance’s U.S. operation was placed under an order of rehabilitation; however, efforts to rehabilitate were unsuccessful and the company was put into liquidation and declared insolvent on October 3, by the Court of Pennsylvania. The Superintendent is of the opinion that the liquidation of the company in the U.S. will adversely affect the branch and that his action is necessary to protect the policyholders and creditors in Canada.

OSFI has appointed KPMG Inc. to assist it in managing the business and affairs of the Canadian branch.