Institute to investigate insurer’s collapse.

An investigation committee is deciding what form the probe will take, but it is likely to include the work of auditor KPMG and finance director and ICAEW member Dennis Lomas.

‘The institute is currently considering the most appropriate means for an investigation,’ a spokesperson said. ‘Members of the investigation committee are currently deciding whether it would be better to conduct an internal investigation or ask the JDS (accountants’ Joint Disciplinary Scheme) to do so.’

Independent entered voluntary liquidation after actuaries from Watson Wyatt found large claims had not been entered into the insurer’s accounting system. Confusion over reinsurance contracts has also been blamed for the mess.

KPMG, which has audited Independent since 1986, said this week it had ‘performed extensive procedures’ on Independent’s reinsurance arrangements and ‘received specific reassurances from management’ of their validity.

But some board members, including FD Lomas, claim they had no knowledge of the controversial cover.

A group of Independent’s creditors, brokers and institutional shareholders have approached legal firm Class Law to look at the possibility of taking action against KPMG and Independent directors.

PwC to liquidate Independent

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