The broker is accused of owing XL Catlin £800,000 in received premiums
Wholesale broker Orbit Underwriting has appointed administrators as it fights a lawsuit brought by former backer XL Catlin.
The broker, which previously had XL Catlin as a coverholder, entered administration on 2 November, and is understood to be no longer trading.
XL Catlin has transferred the management of any insurance policies written by Orbit on its behalf to Lawshield UK (part of the Connexus Group).
Orbit in September was forced to apologise to customers following a continuous unavailability of its system.
A spokesperson for XL Catlin said any policyholders with any queries should contact Lawshield.
The first public signs of conflict began in September when XL Catlin sued Orbit and two of its chief directors.
Orbit was accused of ‘dishonest’ failure to pay over all premiums to XL Catlin.
Orbit received £1.2m premiums in April 2018 but failed to pay them over to XL Catlin, breaking the terms of their agreement, XL court papers allege.
Orbit paid some of this to XL Catlin in July 2018, but the insurer alleges it is still owed around £800,000 from Orbit.
The claim form submitted by XL Catlin shows it terminated its agreement to serve as coverholder for Orbit in April 2018, ending an agreement that stretched back to February 2017.
A filing on Companies House further reveals that in November 2018 Orbit Underwriting appointed administrators.
XL Catlin is also pursuing legal action against Orbit’s former principal director Stuart Lowe and finance director Lee Stevens, both of who resigned from their roles in September 2018.
XL Catlin alleges both acted “dishonestly” in transferring the money owed out of a premium account and into a business account for the general expenditure of Orbit, and for Lowe’s personal use.
The insurer is seeking all of the money owed, plus compensation, along with additional compensation for the “dishonest” actions of Lowe and Stevens.
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