Latvian insurer wrote 6.8% of the solicitors professional indemnity market last year
Unrated Latvian insurer Balva is to start a winding-up process after its regulator withdrew its operating licences.
The Financial and Capital Market Commission (FCMC) said Balva had “failed to carry out the necessary improvements” and was “incapable to ensure fulfilment of the regulatory requirements, that is, the levels of provisions and capital adequate to its business volumes.”
Balva must now appoint a liquidator and agree with the FCMC how it will deal with its debt. Options for covering its debts includes selling business to another insurer or cancelling the policies and refunding customers part of their insurance premium.
Its other option is to transform into a new company that does not deal with insurance.
Balva is obliged to continue to meet policy requirements for the time being.
The FCMC barred Balva from writing new business in April because the insurer did not give it enough information about its activities in the UK.
Balva wrote £16.4m of premium in the solicitors’ professional indemnity insurance market at last year’s 1 October renewals, giving it a 6.8% market share.
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