At least three former directors of Independent Insurance will join the class action by an estimated 2,000 people against those involved in Independent's collapse.
Meanwhile, Labour MP Barry Gardiner has asked for an independent external inquiry into the Financial Services Authority's (FSA) role in regulating the failed insurer.
This is the latest news to emerge from the Creditors of Independent Insurance Group (CIIG), chaired by Argyll Insurance boss Kevin Young and advised by Class Law partner Stephen Alexander.
The directors are believed to have lost large amounts of money, as the liquidation meant their shares in the company were worthless and they would not get generous redundancy packages.
Alexander said the CIIG was likely to have decided from whom it would seek compensation by September, as evidence was “raining down in bucketfuls” on the group.
He said former employees had deluged the CIIG with information on dealings within the company and many were making signed statements, particularly those who bought shares after receiving written assurances from the company on its stability.
Alexander said the evidence being obtained indicated practices at the company in its final months had roots in practices established months or even years previously.
“These troubles did not appear overnight – there was a black hole that started off as a fairly minute spot, which grew and grew and grew until the company ran out of money.”
At the recent CIIG briefing, Gardiner said the government was in a “don't-know mode on regulation as it relates to Independent”.
He said the FSA's actions needed to be more transparent and disparaged its claim that greater disclosure would ruin market confidence.
“Sunlight is the best disinfectant,” Gardiner said.
Both Barry Gardiner MP and Stephen Alexander of Class Law will be speaking at the Insurance Times Broker Briefing II on Friday 20th July 2001 in Westminster. For more details and to register to attend this briefing, go to www.insurancetimes.co.uk/briefing. Please note that attendance is strictly limited to brokers/intermediaries.
