Following warnings from the FSA over unauthorised trading by underwriting agency Tribune Risk and Insurance Services, it is thought that 93 jobs at the company's Scottish headquarters in Eskbank, Lothian, have been lost.
Tribune is now believed to have a workforce of just six, based at a sales office in Kent.
Dan Schwarzmann, partner in appointed liquidator PricewaterhouseCoopers, said: "Our initial investigations have shown that there are some 40,000 individuals who innocently assume that they have insurance cover when in fact they do not.
"Unfortunately we have had to make the majority of staff redundant with immediate effect as there are no funds within the company with which to continue to pay salaries."
