The FSA is "bullish" that action could be taken against the senior management of GoshawK after Syndicate 102 was placed into run-off.
According to senior Lloyd's sources, GoshawK's management have ...
The FSA is "bullish" that action could be taken against the senior management of GoshawK after Syndicate 102 was placed into run-off.
According to senior Lloyd's sources, GoshawK's management have been monitored by the franchise board since March this year and all files on its investigation were passed to the FSA.
It is understood Lloyd's would rather the FSA take action over the directors' culpability.
An FSA spokesman said: "No decision has been made yet as to whether further action will be taken against the management of GoshawK."
According to Lloyd's sources, doubts had been raised by the franchise board over the "operational management" at GoshawK.
In the summer, a letter was sent to chief executive Chris Fagan from the franchise board demanding management changes. In response, chairman David Hooker left the company in September.
Goshawk was forced to pull out of Lloyd's after being hit by the collapse of ambulance chaser The Accident Group and the Columbia space shuttle disaster.
A marine underwriter underwrote the cargo of the space shuttle in breach of the treaty agreement on the company's reinsurance.
Attempts to rescue the syndicate failed on Friday when the group announced it was putting the syndicate into run-off to focus purely on reinsurance business through its Bermuda-based subsidiary, GoshawK Re.
GoshawK admitted on Tuesday that nobody had offered to buy the company - despite it being up for sale since July. It is understood Lloyd's managing agents Chaucer and Euclidian had looked at buying the business.
The group expects to lose its Funds At Lloyd's, worth £45m.
It will have to pay £20m to collateralise a letter of credit from Barclay's Bank.
It has also written off £14.6m of goodwill on Syndicate 102.
Against these losses, worth £79.6m, it will write back underwriting liabilities worth £47m, leaving a balance of nearly £33m.
Further restructuring costs incurred in closing Syndicate 102 will take the total slightly higher and the company gave an "early estimate in the region of £35m".
The fall-out will also hit Munich Re, it is believed.
The German reinsurer will lose £15m after providing a letter of credit to GoshawK.
