Insurer narrowly fails to head off litigation from stop loss Names as compensation scheme fails
Euclidian's bid to settle claims relating to a stop-loss mutual company called Integer has foundered. The claim is estimated to be worth up to £20m.
A vote was held among members of the mutual (now in run-off), which was managed by Euclidian. Dunlop Slazenger chief executive Alan Lovell, who acted as scrutiniser on the vote, said Euclidian failed to secure the number of votes needed to back its scheme of arrangement to settle with the members.
He said that provisional data showed 68% by value and 78.5% by number voted in favour of the scheme for class one and that 66.5% by value and 78.7% by number voted for the scheme on class two.
"This is insufficient, as 75% by value was the minimum requirement for the scheme to go ahead," he said. The figure, set by court, was, said Lovell, "a very demanding figure".
Lovell added: "The scheme now falls away and the Stop Loss Recovery Group (SLRG) will pursue its writ. It will seek a meeting with Euclidian."
He said: "Considering less than half the number of members voted, there is an enormous onus on the SLRG to deliver, as the vote has delayed payment to the majority and incurred cost."
SLRG representative David Phillips said: "Only 27% of Integer's membership of 2000-plus Lloyd's Names voted for the litigation waiver and now Euclidian must respond."
Euclidian declined to comment.