FSCS may have to foot the bill for some claims as insurer calls in administrators
Millburn Insurance Company has called in the administrators after ceasing to write new business earlier this year.
The company is currently unable to pay claims, and the Financial Services Compensation Scheme (FSCS) may have to foot the bill for some of the failed insurer’s claims.
It is thought to be the first insurer to fail since the Prudential Regulation Authority (PRA) took over the regulation of insurers in April this year.
Millburn covers property, educational services and motorsport, and has about 19,000 policies in the UK.
Neil Mather and Christopher Morris, partners of corporate recovery firm Begbies Traynor have been appointed Millburn’s administrators.
The company said insurance policies would remain valid, but that it would be unable to pay claims while its financial position was being assessed.
It said policyholders, particularly those with claims, should contact their brokers for assistance in the first instance.
It added that policyholders may also be entitled to compensation from the FSCS.
Millburn stopped writing business voluntarily following a review of its businessby the Prudential Regulation Authority (PRA).
No redundancies will result from the administration as the company mainly sold policies through third-party coverholders and brokers, and so it had no direct staff.
Mather said: “Over the coming weeks we will be working hard to assess the company’s financial position and agree the best course of action.
“It is a highly unusual event for an insurance company to find itself in administration; this is the first we have seen for almost five years.”