High Court writ issued for £2.2m unpaid claims
CX Re is being sued by Groupama for £2.2m in a breach of contract dispute.
Groupama said it is due payment totalling £2.2m under the terms of motor and non-motor stop loss reinsurance agreements signed with CX Re.
In its High Court claim, Groupama said CX Re "wrongfully and in breach of contract has failed to pay the sum".
A CX Re spokesman said: "It [the claim] appears to have been issued in error and Groupama is aware of this".
But Groupama said: "High Court proceedings have been served against CX Re in an effort to resolve a long outstanding reinsurance claim."
The High Court claim, which was issued on 28 January 2004, said Groupama was due the £2.2m "under contracts of reinsurance, being a motor business stop loss reinsurance agreement and a non-motor business stop loss reinsurance agreement."
Groupama said £0.5m was due in respect of the 2002 year of account and £1.7m is due in respect of the 2003 year of account.
Groupama said it was also claiming interest on the sum owed pursuant to section 35A of the Supreme Court Act [1981].
In December 2003, furious brokers made a group complaint to the FSA about CX Re's "obstructive and cynical" claims payment policy.
The complaint to the FSA was made under the auspices of the London Market Brokers' Committee and the FSA is understood to have approached the company regarding the brokers' concerns.
One broker said: "We're at the mercy of a company that has adopted a cynical, scorched earth policy of obstructing and delaying claims."
CX Re chief executive Philip Singer refuted the brokers claims.
"We met with the brokers and explained the situation.
"Once CNA Re [the former name of CX Re] went into run-off we adopted a new way of processing claims and there was a knee-jerk reaction from some of the brokers," said Singer.
