LONDON (AFX) - Royal & Sun Alliance Insurance Group PLC said it has reached settlement with Wilmington Trust in the ongoing Student Finance Corp (SFC) litigation in the US.
RSA's US subsidiary Royal Indemnity Company (RIC) has been fighting since 2002 to avoid paying out up to 396 mln usd in student loan insurance. RIC wants to cancel credit risk insurance policies it issued to student loan company Student Finance Corp on the grounds that it was not made aware of the true default rate.
Wilmington Trust, one of the three remaining plaintiffs in the litigation, has now agreed to discontinue its part of the legal action, RSA said in a statement.
As part of the settlement, RIC will pay 11 mln usd to Wilmington, while the latter will assign to RIC all of its SFC-related student loans for collection.
The insurance group also said it completed the 200 mln usd sale of its US Nonstandard auto business to Sentry Insurance following approval by US regulators. The sale generates a profit of around 130 mln usd, it added.
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