Airline Mutual Insurance, an insurance company set up by a number of airlines in Bermuda, is seeking creditors and members' approval of a proposed Scheme of Arrangement.

The company was set up in 1987 but went into run-off in 1994 when the combination of recession and a soft airline insurance market led many members to question its worth.

A number of airlines and IATA were involved in forming AMI.

The idea was that the airlines would have a control over their own insurance programme, and to try to put an end to the volatile aviation insurance market.

At its peek the company had 46 Member airlines and a further 64 insured airlines.

The company wrote hull and liability insurance, hull war risks and hull deductible insurance.

The Members appointed Thomas Miller (Bermuda) Limited to act as independent Managers to do the day to day running of the company, although most of the work was undertaken through the branch office on the Isle of Man.

In March 1994 the company decided to cease underwriting as insurance rates were at an all-time low, and so it was put into run-off.

Observers comment that this was probably a good decision because since 1994 conditions in the airline insurance market have worsened, reaching all time lows in 1999 and suffering due to the World Trade Center.

According to David Ebdale of Thomas Miller, the scheme of arrangement is intended to bring matters to a speedy conclusion.

"In simple terms, it will settle claims and make payments quicker than would normally occur," he said.

The meeting is scheduled to take place on July 14, 2003 at the offices of Deutsche Lufthansa in Cologne, Germany.

The connection with Deutsche Lufthansa is that Mr. Ralf Oelssner of that airline has always been the president and chairman of the company.