ALBANY, N.Y., August 16 – The New York Liquidation Bureau has filed a lawsuit against OneBeacon Insurance Company, seeking to recover $2.2 million in reinsurance proceeds due to Midland Insurance Company in liquidation.

The bureau said that, under its new administration, it has begun a proactive program to collect reinsurance balances from delinquent reinsurers. The suit is the first step to ensuring that all of Midlands reinsurers fulfill their contractual and statutory obligations, said Erin Carney, spokesperson for the Liquidation Bureau.

We are no longer waiting passively to collect vital assets that are necessary for proper resolution of claims, said Mark G. Peters, special deputy superintendent in charge of the NYLB. The bureau is potentially owed over $100 million from delinquent reinsurers. Our new program seeks to recover these amounts to the full extent possible.

Peters explained that policyholders should not be further disadvantaged by recalcitrant reinsurers who are unwilling to meet contractual obligations to pay the funds owed in a timely manner. In addition to the inherent difficulties of dealing with an insolvent insurance carrier, policyholders are also affected by the diminished amount of assets under the normal distribution process, Peters added.

Midland Insurance Company was a property/casualty insurer, which also acted as a reinsurer, domiciled in the State of New York. The company was placed in liquidation and the New York superintendent of insurance was appointed as receiver by the Supreme Court of the State of New York on April 3, 1986, as Midland wrote a substantial amount of excess coverage for major Fortune 500 companies.