The insurer has been under administration since March 2018
The Financial Services Compensation Scheme (FSCS) is stepping in to protect 300 solicitor firms understood to have professional indemnity policies with collapsed insurer CBL Insurance Europe DAC..
The policies were sold in the UK to sole practitioners as well as partnerships, limited liability partnerships and limited companies.
The UK’s statutory deposit insurance and investors compensation scheme is urging solicitors to make contact if they are affected.
It follows the Central Bank of Ireland lodging a petition with the Irish High Court on 20 February to seek a winding-up order of the Republic of Ireland-based insurance company and to have a liquidator appointed.
This was due to failure by the administrator to restore the company to a sound financial footing.
CBL Insurance Europe DAC has been under administration since 12 March 2018 and ceased paying claims on 9 December 2019. Kieran Wallace of KPMG LLP has been appointed as provisional administrator of CBL.
FSCS then declared CBL Insurance Europe DAC in default on 25 February this year.
Jimmy Barber, chief operating officer at FSCS, said: “FSCS is working closely with the administrator and the Central Bank of Ireland to make sure that any eligible policyholders are protected.
“We are asking any UK-based firms of solicitors that have professional indemnity insurance with CBL Insurance Europe DAC to contact us and make themselves known concerning premium refund claims.”
CBL Insurance Europe DAC provided a range of non-life insurance products in Ireland and the European Union.
This included professional indemnity insurance for solicitors, construction-related credit and financial surety insurance, property insurance and travel bonding. It is authorised and regulated by the Central Bank of Ireland.
The insurer’s products were distributed on a freedom of services cross-border basis within the European Economic Area (EEA) through channels including managing general agents (MGAs) and insurance brokers.
And this meant the contracts were underwritten in an EEA member state that was different from the member state where the risk is located.