Police investigating collapse of third insurer in Gibraltar since the summer
The Gibraltarian police are investigating the collapse of a third insurance company in the tax haven in almost as many months.
De Vert Insurance ceased trading in August and sought a winding up order from the Rock’s Supreme Court last month.
The insurer was licensed in February 2012 by the Financial Services Commission (FSC) but ceased trading just over six months later ahead of an order to do so from the regulator itself, which came in September. The company sold 56 insurance policies to Italian customers with a total premium value of £250,000.
The police are investigating the circumstances that led to the winding up amid allegations that De Vert used invalid or false sovereign bonds to the value of £6m as surety on its capital position.
The case bears remarkable similarities to that of Hill Insurance Company, which claimed to have sovereign bond backing only for the regulator to discover it had no capital at all. De Vert is estimated to have no more than €57,000 (£47,285) in cash from original share capital.
A “denuncia” – a statement by which persons can allege in court their belief that they have been the victim of a crime – has also been lodged in an Italian court against Alliance SM, the company that produced the bond as security for De Vert’s capital position.
Around the same time of the De Vert collapse, Gibraltar-based surety and bond insurer Hill went bust after it was revealed the company had no capital backing.
Documents filed with the Supreme Court of Gibraltar on 28 August 2012 showed Hill discovered on, or about, 17 August 2012, that the bonds it used as shareholder equity were either “non-existent or did not belong to the company”.
The documents for the winding up of the company said Hill issued €10.2m (£8.17m) worth of shares in exchange for three bonds worth at least the same value, and “upon which the company’s solvency depended”.
Then in October, Lemma Europe Insurance Company froze claims payments and went into liquidation after running into financial difficulties. Lemma underwrote a range of products, including liability, marine, bloodstock and householders. It was the sixth largest solicitors’ professional indemnity insurer in the UK in 2010, writing £6.24m premium income.
Last month, De Vert issued a statement confirming its application for the winding up order. The statement also claimed De Vert had been the victim of “an external fraud against the company by a party outside Gibraltar holding itself out as a regulated investment manager”.
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