Section 166 investigation launched over bodily injury claims reporting
The Financial Services Authority has launched a section 166 investigation into Lloyd's underwriter Equity Red Star over its reporting of bodily injury claims, The Sunday Telegraph reports.
The "Skilled Persons Report" requires Equity to appoint an independent body to conduct a review where the regulator has concerns about its corporate governance or system controls.
It comes just two months after Equity's parent company, Insurance Australia Group pumped an extra 206m into Equity Red Star to cope with a surge in bodily injury claims.
An Equity Red Star spokesman told the paper: "Equity Red Star has been working closely with the FSA since the June decision to strengthen reserves following a significant deterioration in bodily injury claim costs. This deterioration reflected broader UK industry experience. IAG, Equity's Australian parent, has entered into a reinsurance arrangement that covers its participation on Syndicate 218 for the 2001-2009 underwriting years, to provide protection against further claims cost deterioration in the motor book.
"No Equity customers are affected and the company has undertaken a programme of remedial action which is its primary focus. The business will continue to co-operate with the FSA."
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