Policyholders’ funds at threat as broker collapses

In what is believed to be the first insurance broker to enter administration since the FSA took over regulation of the industry in February, BPS Insure today appointed Begbies Traynor as administrators.

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Begbies’ appointment follows a decision by the FSA to withdraw BPS’ permission to sell new policies.

Neil Mather and Lloyd Biscoe, joint administrators, have arranged for all BPS business to be transferred to Towergate Underwriting Group, a specialist underwriter that provides insurance policies for selected scheme and niche markets. All 86 BPS staff members have been transferred to Towergate.

Mather said that the new owners would investigate whether any of BPS’ 20,000 policyholders had been left without cover as a result of the company’s failure.

He added that administrations among insurance brokers had been rare, but occurrences had increased since the relaxation of administration rules under the Enterprise Act in 2003.

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