WHAT HAPPENS WHEN A COMPANY BECOMES INSOLVENT AND IS LIQUIDATED?
Liquidation is similar to bankruptcy. When a company is declared insolvent by a court of competent jurisdiction, a Liquidator is appointed who gathers the companys assets for distribution and determines what liabilities, such as bills and claim payments, it has. The Liquidator then develops a plan to distribute the companys assets according to established law and submits the plan to the Court for approval. The liquidation process could take several years. The PA Insurance Department web site, or the web site of the insurance department of the state where the insurance company is being liquidated, may provide additional information.
