The committee’s inquiry will be questioning the travel agents chief executive, finance director and chairman

The Business, Energy and Industrial Strategy Committee (BEIS) has launched an inquiry after travel agent Thomas Cook filed for compulsory liquidation.

It is not known what will happen with Thomas Cook’s insurance arm at present, it policies are underwritten by White Horse Insurance Ireland. 

A statement on White Horse Insurance’s website says that it will “continue to operate as normal despite the recent compulsory liquidation of the Thomas Cook Group”.

The statement continues: ”White Horse operates independently from the Thomas Cook Group and is regulated by the Central Bank of Ireland.

”White Horse  is required to hold enough capital to ensure that it can honour any  insurance claims which may be made by existing customers. The recent Thomas Cook compulsory liquidation has no impact on customers with an insurance policy underwritten by White Horse.

”While Thomas Cook was an important distribution partner,  White Horse has diversified its business over the last three years and has built a successful B2B business with partners outside of the Thomas Cook Group.”

Meanwhile BEIS’s committee’s inquiry will be seeking to question Thomas Cook executives, including the chief executive, finance director and chairman as well as the firm’s auditors – PwC and EY, the Financial Reporting Council and Insolvency Service.

The inquiry is currently looking for evidence on the matter, with 10 October deadline.


It began on 26 September and focuses on issues such as executive remuneration, accounting practices, role of auditors as well as the impact on small businesses and suppliers of the collapse of the travel agent.

Rachel Reeves, MP and chair of the BEIS committee, said: “This latest corporate failure has shone a light once again on the use of aggressive accounting methods to aid bumper pay-outs to company executives and the apparent inability of auditors and regulators to curb these practices in the wider interests of shareholders, investors, and the public.

“The BEIS Committee has a long-standing interest in corporate governance, executive pay, and audit reform which we are keen to follow up in this inquiry. The main players in the sad demise of Britain’s oldest travel firm should face public scrutiny and be held to account for their actions before the company collapsed.

“The Committee expects evidence hearings to begin in mid-to late October. Specific dates and timings for the inquiry evidence hearings will be announced in due course.”

Slow-progressing audit reforms

On the 26 September, Reeves wrote a letter to MP and secretary of state for BEIS – Andrea Leadsom raising concerns about the slow progress of audit reforms.

The letter stated the following:

“On the question of the role of auditors, the Committee has noted with concern various press reports surrounding the collapse of Thomas Cook and the role of its auditors PwC and EY. The Times reported yesterday that the company’s former chief executive revealed that the Group had a balance sheet deficit in excess of £3.1bn, including £1.9bn of debt and guarantees. Despite this, the Daily Telegraph reported that Thomas Cook executives had awarded themselves more than £20m in bonuses over the past five years.

“The Times further reported that the company had used “aggressive accounting methods to flatter its financial performance”. The Financial Times has drawn particular attention to the use of ‘separately disclosed items’ and ‘exceptional one-offs’ in its balance sheets and its treatment of goodwill. EY in its 2018 audit of Thomas Cook’s accounts noted that: “Separately disclosed items are not defined by IFRS and therefore considerable judgement is required in determining the appropriateness of such classification”.

“The Times reported that Thomas Cook’s cash liabilities include £388mn due to hotel partners and £272mn to other external suppliers.”

It stated that the Committee is “dismayed” that similar issues have been identified in the collapse of Carillion and BHS, suspecting these may have also occurred with Thomas Cook.

Reeves cited a report published in April – Future of Audit which recommends that “auditors should widen the scope of audits, including the examination of the payment practices of the companies they audit.

She said that this could help identify underlying problems with a company’s finances and allow earlier interventions to address them.

The ABI said that it has received a letter from Leadsom, and it is considering the contents before responding, it has no further comment at this stage. 

Insurance Times has contacted the the Bank of Ireland and White Insurance for comment.