Emergency Physicians Insurance Exchange Risk Retention Group (EPIX or the Company) was placed in rehabilitation on February 26, 2021, by order of the Vermont Superior Court for Washington County (Docket No. 21-CV-348). The Court appointed the Commissioner of the Vermont Department of Financial Regulation as Rehabilitator. The proceeding is being conducted pursuant to 8 Vt. Stat. Ann. c. 145, Subchapter 3.
The Commissioner requested that the Court place EPIX in rehabilitation on grounds that the Company was insolvent and that the continued transaction of business would be hazardous financially to policyholders, claimants, and the Company’s creditors. The Commissioner consulted with the Board of Directors which consented to rehabilitation. The Order for Rehabilitation directs the Commissioner as Rehabilitator to take control and possession of the assets of EPIX, administer them under the general supervision of the Court, and implement the Plan of Rehabilitation detailed in ¶ 8 of the Petition for Rehabilitation. The Plan of Rehabilitation is designed to ensure that EPIX creditors are in no worse position than they would enjoy in liquidation and contemplates, among other things, the following:
- EPIX will pay all reasonable administrative expenses in full in the ordinary course of business. See 8 Vt. Stat. Ann. § 7081(1) (priority class 1).
- The Company, as directed by the Rehabilitator, will adjust and determine policyholder-level claims and other policy-related obligations. See 8 Vt. Stat. Ann. § 7081(3) (priority class 3). The Rehabilitator will then reimburse policyholders for 40% of the costs of defense and indemnity, deferring payment of the remainder.
- EPIX will defer payment of liabilities that would fall within priority classes 4 through 10 in liquidation. 8 Vt. Stat. Ann. § 7081(4) through (10) (deferred priority classes).
- When the Company’s obligations can be estimated with a high level of confidence, the Rehabilitator will propose to the Court an additional (final) distribution and request that the Court convert the proceeding to a liquidation,
Additional information is available in a Q &A document posted below along with key rehabilitation records.