Abbey and Capita in running for TAG run-off business

The fallout from the demise of The Accident Group (TAG) is still hitting the market with one underwriter, NIG, putting all future legal expenses business under review.

A NIG spokesman said: "NIG is continuing to underwrite its existing legal expenses schemes. But we are actively reviewing schemes that come up for renewal. As part of this, one scheme that recently came up for renewal had to find an alternative insurer."

A legal expenses source said NIG had decided to stop writing all new after-the-event (ATE) business. "Its exposure to TAG is extremely high and I understand they are also considering pulling out from the before-the-event market." The source said the move follows the departure of NIG special risks underwriter Mike Rapley.

Meanwhile, Abbey Legal Protection and Capita Insurance Services (CIS) are believed to be the frontrunners to manage the run-off account for TAG. Sources said a decision was imminent, but Abbey Legal ATE business director David Hartley said: "As far as I'm aware no one has made any concrete decisions yet." Earlier this year, Abbey was appointed to handle the run-off account for Claims Direct. CIS was not available for comment when Insurance Times went to press.

Reports last week said administrators found an £11m hole in TAG's tax and National Insurance (NI) contributions. The no-win, no-fee firm is believed to have stopped paying its employees' income tax and NI contributions in January, despite continuing to deduct them from the staff payroll.