Milwaukee Archdiocese explores insurance buyback option

Insurance companies could pay a portion of the Archdiocese of Milwaukee's sex-abuse settlements, despite court rulings finding them not liable, under a strategy being considered by the church's bankruptcy lawyers, according to a document filed in the case.

The archdiocese appears to be exploring the possibility of a so-called insurance policy buyback, in which an insurer buys back its policies, leaving the insured with a pool of money, and protecting itself against potentially greater losses - in this case, if the court rulings are overturned on appeal.

Archdiocese spokesman Jerry Topczewski said in an email that the church will consider all options to resolve the insurance coverage issue, including a buyback.

"But it's premature to speculate about specific options and their impact on the Chapter 11 proceedings," he said.

The archdiocese filed for Chapter 11 bankruptcy protection in January as a way to pay its mounting clergy sex abuse claims and continue to operate. The archdiocese has maintained it has less than $10 million available to pay claims, because most of its $100 million in assets is in restricted trusts and accounts - and because courts have ruled it cannot tap its insurance coverage for settlements.

A buyback could dramatically increase the size of settlement payments to the estimated 100 people who have come forward so far to allege abuse by clergy or other employees of the church.

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