Luann Petrellis may be relatively new to the AIRROC network, but her experience in managing run-off portfolios and her most recent work on legislative reform efforts to support restructuring have fueled her rapid ascension into the AIRROC panoply of stars: The AIRROC Person of the Year Award of 2018. She joins past winners: Stephen Johnson (2017), William Flaherty (2016), The Reliance Team (2015), Anna Petropolous (2014), Karl Wall (2013), Robert Sherwood (2012), Gary Lee and Andrew Rothseid (2011), Mindy Kipness (2010), Barbara Murray (2009), Dan Schwartzmann (2008), Brian Snover (2007), Oliver Horbelt (2006), and Paul Dassenko (2005).
In presenting the award, Carolyn Fahey, the Executive Director of AIRROC, acknowledged Luann’s credentials and significant experience. “The award was created so that AIRROC can give recognition to someone who has had an impact in the legacy sector of the insurance industry.” Luann received five nominations! One of her nominator’s said about her – “No one is more deserving of this award for all she has done, in a very modest manner, in promoting restructuring legislation in the U.S.” Another supporter noted she used great “courage, conviction and persistence” to push this agenda forward. And another noted: “For over two decades, Luann served as a chief operating officer for global insurance carriers managing the run-off operations of P&C and workers’ compensation portfolios as well as ceded and assumed reinsurance business. She established and implemented successful run-off plans to achieve operational, regulatory and capital efficiencies, leading groups of professionals on a number of projects focusing on the orderly run-off of large blocks of insurance and reinsurance business.
Luann Petrellis believed that, to compete globally, the U.S. insurance industry could benefit from restructuring tools similar to what exist in the UK and most other modern jurisdictions. To that end, she worked to change the status quo to provide effective restructuring options that adequately protect policyholders and provide flexibility to efficiently manage runoff portfolios.
Through collaboration with the Superintendent of Banking and Insurance for Rhode Island, Joe Torti, Luann worked toward facilitating legislation that would allow companies to transfer blocks of runoff business through a court sanctioned novation process with multiple safeguards for policyholder protection. This legislation, referred to as the Insurance Business Transfer (IBT), was the first restructuring tool of its kind in the U.S. that enables companies to achieve finality for commercial P&C legacy liabilities – a critical goal for any company considering restructuring. Insurance companies are bought and sold in their entirety but there are limited options to transfer embedded blocks of business within the company aside from reinsurance options in various forms. However, reinsurance creates long-term relationships and reporting requirements where many companies would prefer finality on transfer.
More recently, Luann has been working with the Oklahoma Insurance Department to bring to fruition that state’s Insurance Business Transfer Act, effective 1 November 2018, which will allow an insurer or reinsurer, through a court supervised process, to transfer a portfolio of business to another insurer domiciled in Oklahoma. The Oklahoma statute is broader than the Rhode Island legislation because it applies to all lines of business. The Oklahoma act also includes both active and discontinued business, so it offers broad opportunities for companies to restructure. Luann has been in the forefront of these recent efforts to create the business regulatory framework necessary for companies to more effectively compete in the global economy.
AIRROC looks forward to continued work with Luann in building the intellectual capital and credibility that is critical to support industry initiatives to develop effective markets and run-off solutions.
Refer to page 32 in the Winter 2018-2019 issue for article. https://www.airroc.org/assets/docs/matters/AIRROC_Matters_Winter_2018-2019_vol_14%20_No_3.pdf