PracticeConsultingPwC probes Independent.

PwC probes Independent.

Provisional liquidators from PricewaterhouseCoopers were this week appointed at Independent Insurance following its decision to suspend writing new business a week ago.

Mark Batten and Dan Schwarzmann, partners in the firm’s insurance restructuring group, were appointed following revelations about the insurer’s financial position.

Speculation over the state of the company, which is audited by KPMG, began following work by external actuaries from Watson Wyatt which revealed huge losses arising from claims that had not been entered into the company’s accounting system.

The Serious Fraud Office is now investigating.

Watson Wyatt had previously provided Independent’s actuarial certificate, and KPMG had signed off its 2000 accounts.

Shares in Independent were suspended at 81.5p last Monday, after it failed to secure £200m to bolster its finances.

PwC was called in to assess its position following a decision to move to run off – a position where the insurer cannot write new business and relies on its assets to pay any claims.

But directors at Independent said they were uncertain whether the company’s insurance operations could be run off on a solvent basis. Founded 15 years ago by Michael Bright, who quit as chief executive last week, Independent was the darling of the insurance industry.

But from the high of a float in 1993, Independent finds itself on the brink. As Accountancy Age went to press, finance director Dennis Lomas, who has been FD since 1996, remained in place.

PwC said there would ‘inevitably’ be some job losses at the group, which employs 2,000 people across the UK.

It is also believed PwC experts could be looking for evidence of a deliberate attempt to understate claims.

‘We will be conducting a forensic investigation into the financial position of the company as a matter of urgency, including the reasons for the company’s failure,’ PwC’s Batten said.

Updates on this story at www.accountancyage.com.

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