Liquidators appointed at Independent
Provisional liquidators have been appointed at Independent Insurance following its decision to suspend writing new business on Thursday last week.
Mark Batten and Dan Schwarzmann, partners in the Insurance Restructuring Group of PricewaterhouseCoopers, were appointed after approval was given last night by the High Court in London.
Concerns over the state of the insurance company first came to light in May when external actuaries Watson Wyatt discovered huge losses arising from claims that had not been entered into the company’s accounting system. Watson Wyatt had previously provided Independent’s actuarial certificate and KPMG had signed off its 2000 accounts.
Independent called in PwC to assess its position following the decision to move into run off – a position where the company cannot write new business and relies on its assets to pay claims. But directors at Independent claimed today that they were uncertain whether the company’s insurance operations could be run off on a solvent basis.
And it emerged today that as part of the investigation, PwC experts could be looking for evidence of whether there was any deliberate attempt to understate the size of the claims.
Batten said: ‘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.
Independent’s shares were suspended at 81«p last Monday, after the company failed to secure £200m to bolster its finances.
Previously Independent Insurance was the darling of the insurance industry and headed by flamboyant figure Michael Bright. In April, Bright resigned as chief executive prior to Watson Wyatt unearthing the bombshell over losses.
PwC said as a result of the liquidation there would ‘inevitably’ be some job losses at the group. The company has 2,000 employees at three offices in London, Edenbridge and Cheadle near Manchester.
The liquidators said they would put together a Scheme of Arrangement to provide for part payment of claims by the company in the event of a deficiency arising.
Policyholders have been advised by the liquidators to continue to submitting claims information in the normal manner.