Independent Insurance's private policyholders will be able to claim money back from premium finance companies if they were paying for their policies on credit.
Class Law partner Stephen Arnold, who is advising the Creditors of Independent Insurance Group (CIIG) on a class action against groups involved in the insurer's collapse, said personal lines policyholders would have a claim under Section 75 of the Consumer Credit Act.
In a curious legal twist, credit companies may have to pay back the unpaid portion of the yearly premium, rather than the portion that has been paid by the policyholder, Arnold said.
It is likely a test case to claim back money will go ahead, opening the way for other policyholders to have their premiums returned by the credit companies.
The CIIG is also in correspondence with the credit companies over the position of commercial policyholders.
Arnold said the credit companies could also be a valuable source of information to the class action.
“Clearly the finance companies have a close working relationship with Independent, some had a very close relationship in terms of staffing,” he said.
“We need to find out what was the level of knowledge within the companies on the state of Independent.”
Arnold said the group had already been deluged with information on dealings within the company from former employees and many were making signed statements, particularly those who bought shares af
