What is receivership in insurance?

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    Circumstances may arise where an insurer is facing liquidity problems or other challenges that may cause it not to honour their obligations to clients. The company is placed in the custodial responsibility for the property of others in this case, IRA. This is because a company cannot meet financial obligations or enters bankruptcy and can subject its policyholders, claimants and other creditors to greater than normal financial risk; including the possibility the company may not maintain compliance with the applicable statutory capital and/or surplus requirements.

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