Clients may be left uninsured, and insurers and brokers owed money, as administrator attempts to pay back creditors
A number of insurers, including Brit Insurance, face losing a “significant” sum of unpaid premiums after a broker was placed into administration.
The broker, Attwood & Hart, based in Shenfield, Essex, and a member of the Cobra Network, went into administration last month after it was unable to secure investment to save the business following a series of claims that crippled its private medical care scheme.
There were also fears that clients could end up without proper insurance cover after premiums were not passed onto insurers, with the money being used to fund the rest of the business.
The FSA was unable to comment. The company was no longer listed as authorised on the FSA register, however.
Attwood’s general insurance book of business has been reduced considerably and its annual income is now predicted to reach £40,000. This is expected to be transferred to Phoenix Financial Services, along with the broker’s life and pension business as the administrator ThorntonRones attempts to pay back creditors.
It is unclear, however, whether insurers and brokers that are owed money will be paid back following a shortfall in Attwood’s client money account, which has yet to be quantified.
According to the administrator’s report – seen by Insurance Times – the task of calculating who is owed what is “mammoth”, and is “unlikely to be conducted in full”.
One year ago, Brit, which supported the Attwood’s aviation employers’ liability scheme, worth £150,000 in income per year, declined the company’s offer to resolve the shortfall and refused to deal with the broker.
Director Peter Attwood told Insurance Times: “We have a duty to clients and to underwriters.” He refused to comment further.
The broker was formed in 1986 by Peter Attwood and Martin Hart, both former brokers in the Lloyd’s market. Hart eventually quit the company after three years.
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