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Court Updates Bankruptcy Court Procedures

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The U.S. Supreme Court briefly mentions insurers in amendments to the Federal Rules of Bankruptcy Procedure.

The court released the amendments Wednesday when it sent courtesy copies of the changes to the leaders of the U.S. House and the U.S. Senate.

In Rule 2015, the bankruptcy court system requires a trustee or debtor in possession to send a bankruptcy notice to “every insurance company which has issued a policy having a cash surrender value payable to the debtor” as soon as possible after the commencement of the case.

The requirement does not apply to “any entity who has knowledge or has previously been notified of the case,” according to the text of the amendments.

A second change, described in Rule 6011, which affects disposal of patient records in health care business bankruptcy cases, requires the trustee or debtor to tell patients and patients’ health insurers what will happen to the patients’ records.