The Financial Services Authority (FSA) was warned as far back as December 2000 that Independent Insurance's French company was reserving claims for virtually nothing and not entering other claims at all, an Insurance Times investigation has revealed.
The French insurance regulator, the Commission de Contrôle des Assurances (CCA), began investigating Independent Insurance SA last September and sent a detailed report of its shocking findings to the FSA in December.
Meanwhile, Independent's UK headquarters had been sending large amounts of money to plug holes in the French company's finances and continued to do so until just before its profits warning in February.
In February, Independent warned its profits would fall £20m below market expectations, blaming poor results in France and increased provision for future UK claims.
At the time, director John Blakemore said the French problems accounted for £12m of the shortfall.
“The French operation has been turned around from personal lines to commercial, but not quickly enough to cover the expenses,” Blakemore had said.
He said unprofitable lines of business had been cut and the entire French management team removed.
However, a CCA spokesman revealed that the French books were being falsified, with some claims not being entered and others being entered at “miniscule” sums, on the orders of senior figures in the UK office.
“The CCA informed the FSA in December of what w
