The EU’s approach to passporting and compensation for customers has been attacked amid the latest insurer failure.
As reported in Insurance Times, unrated Danish insurer Qudos has become the latest passported insurer to hit the rocks, leaving bewildered customers looking for new cover.
But from next year, the Danes will not guarantee any customer outside their country in the event of a domestic insurer going bust.
It means if a Danish-regulated insurer passports into the UK and underwrites a customer here, that customer will not get any compensation from the Danish Guarantee Fund.
Brian Carey, from the Sunday Times business expert commentator, says: ”From January 1, the Danish Guarantee Fund will pay out only to policyholders in Denmark in the event of a local insurer failure. It seems the Irish Quodos claims may just get under the wire.
”That surely is not good enough. The EU seems in no hurry to harmonise the rules around compensation for bust passporting insurance companies. In its absence, there will likely be more liquidation, more confusion.”
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