It is too early to predict what the implications of the failure might be for levy payers – FSCS
Policyholders of failed unrated insurer Balva are to get help from the Financial Services Compensation Scheme (FSCS), the body has announced.
Balva has been declared in default, but the FSCS is unable to confirm how long it will take to process any claims.
The FSCS is now working with Balva’s liquidator Rolands Strazdiņš, as well as with Balva’s UK claims handling agents, to ensure any outstanding claims are processed as quickly as possible.
The scheme will offer protection for most of the policies Balva sold in the UK to individuals, small businesses and any UK policyholder who purchased compulsory employer’s liability cover.
Balva also sold policies that may qualify for FSCS protection, including general liability insurance and professional indemnity insurance.
Balva collapsed in June last year, after the Latvian regulator, the Financial and Capital Market Commission, barred the insurer from writing new business in April.
In the 2012/13 indemnity period Balva wrote £16.4m of premiums in the solicitors’ professional indemnity insurance market, giving it a 6.8% market share and making it the third largest insurer. In volume terms, it covered 9% of firms,.
The FSCS said: “It is too early to predict what the implications of the failure might be for levy payers. We will provide an update on this as soon as more information is available and will publish updates on our website as necessary.”
The FSCS protects general insurance policies for 90% of the value of the claim with no upper limit. The scheme protects compulsory insurance, such as employers liability insurance, in full.
Chief executive Mark Neale added: “FSCS is here to protect consumers when authorised financial services firms go bust and we are stepping in to help policyholders of Balva as a priority.”