An Order of Liquidation was entered against Western Specialty Insurance Company on May 6, 2002. Subsequently on May 30, 2002 a finding of Insolvency was entered by the supervising court.

On April 22, 2002, the Director of Insurance issued a Notice of Impairment to Western Specialty stating that the company's surplus was impaired in an amount in excess of $1,800,000, and ordering the company to correct it's impairment within thirty days. On April 26, 2002 the companies board of directors determined that they would not correct the companies impairment, and passed a unanimous resolution to consent to Liquidation under Article XIII of the Insurance Code, by the Director of Insurance. Prior to notifying the Director of this decision, the company dismissed it's employees and closed it's office. 

Upon learning of the situation, the Director of Insurance immediately moved to obtain an Order of Liquidation based on the Board of director's consent, and abandonment of the company, in order to protect the companies policyholders, creditors, and the public at large from the hazardous condition of the company.

Subsequent to the Liquidation, the Liquidator's staff began an investigation into the financial condition of the company and determined that the company was insolvent by an amount in excess of $2,500,000, as of the liquidation date, resulting in the order of insolvency entered on May 30, 2002.

Western Specialty is a wholly owned subsidiary of Western Holdings Incorporated. The company was originally incorporated in April 1986 as Oak Brook Property and Casualty Insurance Company, a wholly owned subsidiary of First Oak Brook Corporation Syndicate, which was placed into Liquidation in 1996. The current name was adopted upon the sale of the majority interest in the company to current ownership in 1996.

The company is licensed in two states ( California and Illinois ) ands also operated on a surplus lines or non-admitted basis in seven additional states, ( AL, GA, IN, KS, KY, OR, SD ), concentrating it's writings primarily in commercial multiple peril, workers compensation, other liability, and private passenger automobile coverages.

The claim filing deadline is May 6, 2003 with a contingent date of May 6, 2004.  1,878 claims have been filed with the Liquidator.  Early access distributions totaling $377,413 have been made to various Guaranty Funds for administrative expenses.

Petition for Approval of Certain State Guaranty Funds Claims; a Final Distribution of Estate Assets; and the Termination of the Liquidation Proceedings and the Closing of the Estate was filed on September 22, 2005;  the petition is set for hearing on October 11, 2005.

On October 11, 2005, the Supervisory Court entered an order approving the claims of certain state guaranty funds; a final distribution of WSIC's assets to priority level (a) claimants; and closing the WSIC estate and terminating the liquidation proceedings.