Danish unrated insurer ordered to submit recovery plan
The Danish regulator has ordered Alpha Insurance to submit a recovery plan amid concerns over its solvency.
Alpha is a Danish insurer with a network of MGAs/brokers across the UK selling its products including fleet, protection and GAP.
The Danish Financial Supervisory Authority (FSA) says the problem stems from Alpha’s calculations of ‘two receivables’, or money owed to it.
The FSA ordered Alpha to reduce its calculations of money owed to it by DKK 35.6 million, or roughly £4.2m.
This reflects the financial position of those owing money to Alpha to make the eventual payments.
As a result of this, Alpha will fall below solvency capital requirements, the regulator said.
The FSA said: ”The Danish Financial Supervisory Authority expects that this order will cause Alpha Insurance A/S’ eligible own funds not to be sufficient to meet the Solvency Capital Requirement. In this case, the Danish Financial Supervisory Authority will order Alpha Insurance A/S to submit a recovery plan.
”The Danish Financial Supervisory Authority notes that the assessment of the valuations of intra-group transactions has yet to be finished.
”The Danish Financial Supervisory Authority is continuing the inspection of Alpha Insurance A/S.”