Closed, unrated insurer ERIC turned down flood claim from CGA’s client
CGA Insurance Services is seeking alternative cover for clients after unrated Icelandic insurer European Risk Insurance Company (ERIC) denied a flood claim.
The Mail on Sunday reported over the weekend that ERIC denied a claim lodged by CGA Insurance client Roslyn Earle after her five-bedroom Wiltshire home flooded.
Earle had obtained the cover through CGA Insurance, the broking division of the Country Gentlemen’s Association (CGA), which in turn placed business with ERIC through underwriting agency Iprism and broker Bureau Insurance Services.
ERIC’s future is uncertain after Iceland’s Financial Supervisory Authority withdrew the insurer’s operating licence on 12 February this year, saying that the company no longer complied with the regulator’s minimum solvency requirements.
The regulator has appointed a three-person ‘resolution board’ to oversee the company.
CGA chief executive William Harrison-Allan said: “We extend our sympathy to clients of the CGA, and to those of other brokers, during this uncertain time.
“We are working hard to ensure our customers are kept up to date with developments and are actively finding them alternative options for insurance cover.”
ERIC declined to comment on the individual claim.
However, a statement from the insurer suggests that the company is continuing to pay some claims despite its current situation.
The company said that it decided at a board meeting to “pay out costs that would minimise future claims”, including paying for alternative accommodation for customers where necessary.
The insurer added: “Loss adjusters will be appointed when appropriate”.
The company said it made its decision to pay out after receiving a letter from Iceland’s regulator
A spokeswoman for the Financial Services Compensation Scheme, which pays consumer claims for companies that are unable to do so, said the organisation was aware of the situation but had not received any claims relating to ERIC.