A "write-down order" is an order of the court directing that the value of one or more of an insurer's liabilities is reduced on such terms as may be specified in the order.
The court may make a write-down order in relation to an insurer if it is satisfied that—
the insurer is, or is likely to become, unable to pay its debts (within the meaning given to that expression by section 123 of the 1986 Act or Article 103 of the 1989 Order), and
making the order is reasonably likely to lead to a better outcome for the insurer's policyholders and other creditors (taken as a whole) than not making the order.
A write-down order—
takes effect on the later of—
the date specified in the order, and
the date on which the appointment of a person to act as the manager of the order first takes effect (see section 377G(7));
ceases to have effect in accordance with section 377H;
may be revoked or varied in accordance with section 377I.
A write-down order may not be made in relation to an insurer—
which is in administration (within the meaning of Schedule B1 to the 1986 Act or Schedule B1 to the 1989 Order), or
which is in liquidation by virtue of—
a resolution for voluntary winding up, or
a winding-up order under section 125 of the 1986 Act or Article 105 of the 1989 Order.
A write-down order may not reduce the value of an excluded liability (within the meaning given by section 377B).
A liability, to the extent of its reduction by a write-down order under this section, is to be treated as extinguished unless and until revived by section 377H or 377I.
In this section, "creditor" includes a contingent or prospective creditor.