What's going on at Independent Insurance? Dealing in the company's shares has been suspended, after they hit a new low at 81.5p. The company is looking for additional finance of £200m – slightly more than its current market capitalisation. And now the board is talking (without details) of “alleged” reinsurance arrangements.

Questions from Insurance Times seem to have ruled out fraud. But can it really be true that reinsurance arrangements were made without the board knowing? And – if this does turn out to be the case – could that affect the validity of the arrangements which they thought were in place? And might that mean unscrambling reinsurance arrangements and starting again – with the dis-advantage that cover could well be harder and more expensive to obtain?

Reinsurance has proved to be the Achilles' heel for this, in many ways excellent, company. The view is gaining ground that the exemplary profits reported year on year were produced on the insecure foundation of under-provision of reserves.

Despite all the bad news, Independent continues to enjoy high esteem from brokers, who rate the company, its quality of service, its underwriting and its management. It would be sad news for a genuinely independent culture to be absorbed and stifled by a takeover. Having said that, the biggest mystery is why there is not a queue of bidders for this sizeable chunk of market share at what is, at first sight, a bargain basement price. Is there more bad news to come?